S-Video output on SVHC players is active for both VHS and S-VHS tapes. VHS (normal) signal is not exactly the same as composite, the Y and C signals are encoded

S-Video output on SVHC players is active for both VHS and S-VHS tapes. VHS (normal) signal is not exactly the same as composite, the Y and C signals are encoded differently, meaning there _can_ be a benefit from only decoding VHS and not re-encoding into composite.