The following is the best info I can find on their recording methods & is quoted from AFTVNews’ review of Recast.
"The Fire TV Recast stores all content to its internal hard drive as unprotected raw MPEG-2 video files in their native resolution. This is important because it means that the full 1920×1080 resolution of channels that broadcast in 1080i is maintained for all recordings. Remember, no US channels broadcast in 1080p. They all broadcast in either 1080i or 720p.
When watching content from the Fire TV Recast, whether it’s live or recorded, and regardless of whether you’re watching through a Fire TV, Echo Show, or mobile device, the raw MPEG-2 video files are transcoded to H.264 with a maximum resolution of 1440×720 at 60 frames per second. This is done to ensure compatibility with a wide range of devices, including older Fire TVs that cannot de-interlace 1080i video.
The bitrate and resolution of the transcoded video are adjusted, on the fly, to ensure a highly reliable stream. This is the same procedure used by streaming video from services like Prime Video and Netflix. So, if you’re watching content at home through a Fire TV with a solid connection, you’ll see the maximum resolution and bitrate, but if you’re watching on a spotty mobile connection, the video quality will automatically adjust to keep the stream from dropping. When viewing content through a Fire TV, the Fire TV Recast may switch to a direct one-to-one WiFi connection between the two devices to bypass your home network if it determines that the direct connection will result in a superior video stream."