No the files are not re-encoded. if they were, I'd like to do both OGG and Mp3, because of the browser standards wars. Some browsers don't play Mp3s- they only play Ogg (Firefox), while others are the opposite. (Safari/IOS)
Pretty annoying.

Decided without having to pay extra server costs for running encoding on the backend, to allow only mp3 and let the users do it. As well this explains why ID3 tags are not managed by the server as well.

To this end it also gives you the ultimate control. If you want to upload a lower quality version, go for it. If you want to put copyright information or other data in the tags, go for it.

Participation does not mean you have to upload here. It's nice to get feedback from peers but it's not required. It's your choice. It's all about pressure to push creativity and work within deadlines- That and the community around it is the point I believe.