Technically it is “sort of” supported by the container, but it is not suitable for social network and this use. Not many clients support it too! Here is the citation and the link 🐶🐾🫡

https://matroska.org/technical/streaming.html

Matroska Streaming
In Matroska, there are two kinds of streaming: file access and livestreaming.

File Access
File access can simply be reading a file located on your computer, but also includes accessing a file from an HTTP (web) server or CIFS (Windows share) server. These protocols are usually safe from reading errors and seeking in the stream is possible. “””However, when a file is stored far away or on a slow server, seeking can be an expensive operation and should be avoided. “””The following guidelines, when followed, help reduce the number of seeking operations for regular playback and also have the playback start quickly without a lot of data needed to read first (like a Cues Element, Attachment Element or SeekHead Element).

Matroska, having a small overhead, is well suited for storing music/videos on file servers without a big impact on the bandwidth used. Matroska does not require the index to be loaded before playing, which allows playback to start very quickly. The index can be loaded only when seeking is requested the first time.
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 i agree mp4 is better for streaming. there is no conversion happening on nostr so for now, it's important to pay attention to the file format for better compatability