I upgraded from wowza 3.x to 4.x this weekend and the first live video streams I did, I noticed pixelation and "smearing" of the video. Now, my understanding is that wowza is and has always taken the video data repackaged it in the correct container (HLS) in this case and sent it along. (Not using the transcoder etc). However I saw this issue on live streams as well as VOD streams where I had not before. I can easily reproduce it on my Nexus 5 using HLS. But I have had people reporting it on iPads and on websites via JW player Pro using HLS.
If I request the MP4 directly from the server using Apache to host it, the video plays as expected. If I request the same file utilizing wowza things start to look odd. I believe it is related to the key frames at 2 seconds but this was not an issue I ever recall seeing in wowza 3.x
direct file link:
Wowza 4.x link:
Link to a segment where I see the issue:
Example of issue via HLS:
Best description I can give is that the keyframe isnt actually being put at the start of the new segment.