Like the codec used to get the stream from Netflix to you, to be decompressed for the capture card (so lossless capture of a lossy source) and then back through

Like the codec used to get the stream from Netflix to you, to be decompressed for the capture card (so lossless capture of a lossy source) and then back through x264/265 so lossy compression on a lossy compression. Just because there is a capture card in the middle doesn't stop it going through multiple lossy steps.