Instagram's video quality adjusts based on popularity, with less popular videos displayed in lower quality. According to Meta executive Adam Mosseri, the company aims to show the highest-quality video possible, but may reduce quality for less popular content. This decision is made at an aggregate level, not individual level.

Source: https://techcrunch.com/2024/10/27/instagram-is-lowering-video-quality-for-unpopular-videos/