I don't know, in terms of how Airplay works. It would be possible theoretically for it to work differently. It's also possible, that it works one way in one mode, but another way in another mode, possibly it has one mode where it's "playing files" and not transcoding but another where it's "sending mixed audio output of the OS" and is. I'd suspect it has a chance of not, if you play a file, and that's the only thing that plays, and you make other noises on the source device and they either play locally or not at all. If the other noises are played through to the destination device, then for sure it's mixing and transcoding- although at least some versions of Airplay are lossless.
Streamers, for example, typically send/receive the original files directly, without reencoding. This is my understanding of how UPnP works, some servers will also transcode as an option, for compatibility, but it's not the default mode of operation, the default is actually just serving the files as is and the sink device receives them and plays them.
You also have systems like Tidal/Spotify Connect where there isn't any transfer of media information at all, the way these systems work is basically the player you are operating becomes a remote control, and just tells the actual playing device what it should be playing, and it then fetches that directly from Tidal/Spotify. So there's no transcoding necessary there either.