Yes and no.
No re-encoding in term of picture parameters (resolution, color, fps, etc) but transforming to different type of electrical signals.
Process of the transforming to HDMI (TDMA signaling) or component or composite executing by specialized chips or parts of that "CPU" (what is not a CPU but SoC with convenient CPU [MIPS] and specialized subsystems for decoding, decompressing, etc).
No re-encoding in term of picture parameters (resolution, color, fps, etc) but transforming to different type of electrical signals.
Process of the transforming to HDMI (TDMA signaling) or component or composite executing by specialized chips or parts of that "CPU" (what is not a CPU but SoC with convenient CPU [MIPS] and specialized subsystems for decoding, decompressing, etc).