Here are possible answers to your questions:
Quest. 1: Its a personal choice. The whatsapp team is trying to offer the best User Experience (UX) they could to users of their app, that is why they have kept a limit of 16MB for video file. Imagine how long it would take to upload a file of about 125MB. Hence, the app compresses the file for quicker upload and seamless experience.
Quest. 2: I guess you already answered this question yourself - Asynchronous programming. The large video file you feed it, gets encoded into a compressed format according to the algorithm they have written for the app. As Devs., we all know about algorithms and we all know there are things you can do to speed up execution. I guess they implemented their very own algorithm using Asynchronous programming that speeds up the process. The ffmpeg library you mentioned i guess was coded in C which i think doesn't support async call (not so sure though). After this, upload takes over.
Quest. 3&Finally: Codecs are standards. If you encode a video file to MPEG4, then try to re-encode it again to MPEG4 even using another program, you will get the same result as far as both programs are using same encoding standards, i.e. they didn't implement a specific algorithm for their programs(this takes years of work). So, when your Whatsapp tries to encode the file, it gives the same result.
Hope I have been able to answer your questions.
MichVeline
Answer from Michveline on Stack OverflowVideo compression is horrible when sharing on WhatsApp
android - Compress video like whatsapp - Stack Overflow
Video compressor? I need to shrink a 1080p 2GB video file to 500MB.
What is the Best software to compress video to the lowest size whilst losing minimal quality
Do videos get compressed on WhatsApp?
Can I compress video for WhatsApp with Media.io on a mobile device?
How to compress a video on iPhone?
Videos
Video Pro app videos get extremely blurry and compressed when sharing them through WhatsApp (directly). Even 4K 60fps footage looks horrible. This doesn't happen on any other app (or any other phone for that matter). HDR and Wide Dynamic Range are off btw. Any alternative way to share them through WhatsApp (bypassing I guess)?
Here are possible answers to your questions:
Quest. 1: Its a personal choice. The whatsapp team is trying to offer the best User Experience (UX) they could to users of their app, that is why they have kept a limit of 16MB for video file. Imagine how long it would take to upload a file of about 125MB. Hence, the app compresses the file for quicker upload and seamless experience.
Quest. 2: I guess you already answered this question yourself - Asynchronous programming. The large video file you feed it, gets encoded into a compressed format according to the algorithm they have written for the app. As Devs., we all know about algorithms and we all know there are things you can do to speed up execution. I guess they implemented their very own algorithm using Asynchronous programming that speeds up the process. The ffmpeg library you mentioned i guess was coded in C which i think doesn't support async call (not so sure though). After this, upload takes over.
Quest. 3&Finally: Codecs are standards. If you encode a video file to MPEG4, then try to re-encode it again to MPEG4 even using another program, you will get the same result as far as both programs are using same encoding standards, i.e. they didn't implement a specific algorithm for their programs(this takes years of work). So, when your Whatsapp tries to encode the file, it gives the same result.
Hope I have been able to answer your questions.
MichVeline
Use media codec instead of ffmpeg for better performance. If your use case is only to compress the video, MediaCodec would be best option for android. It helps you to write the code asynchronously and also gives you lots of freedom to optimize you algorithm.