I feel a bit dirty even considering them encodes. All they do is take an existing release and burn in the subtitles (which does require a re-encode), and package it as a MP4. The biggest problem I have with it is they usually don't have any indication of the original source. You may see it included in a description on Nyaa or something, but it isn't in the filename like it should be.
Although, I'm not nearly as picky about anime and resolutions as some of you seem. The thing is... animation doesn't usually need higher bitrates or high resolution. Unlike real life where you tend to get a lot of color variance from lighting, animation tends to have a lot of uniform color. That's the big reason why an encode of an animated movie (regardless of country of origin) tends to result in a file that's smaller than a live action movie. Most animated movies usually end up being 2.5-3.5GB where a live action movie is around 4.0-5.5GB. However, considering their size, I don't mind using a 1080p encode since the size is about what a 720p encode is for a live action.
That's not a bad thing as they're referred to as "forced subs". In other words, subs that should be displayed regardless of subtitle display settings due to foreign language(s) being used. It's helpful to hardsub them, because people tend to turn subtitles off, and you have to hope the player handles the force sub flag.