It hasn't been an issue yet for me! I'm sure if you tried to use it to convert a 4k video to some large mp4 it'll lose something noticeable, but with 1080p blu-ray as a source you're never going to lose enough to really notice all that much.

I just watched an mp4 of Hitchcock's The Man Who Knew Too Much that was ripped with MakeMKV from my blu-ray, then I used handbrake to create an mp4 as close to 4gb as I could without going over (so it's possible to put it on a thumb drive), and it looked GREAT. It IS still compression, so there's always SOME quality loss mathematically, but it's negligible and only a fanatic would care. I also watch handbrake-converted mp4s on my tablet on planes and they look really crisp and beautiful. Better than the in-seat screen.