Nvargus-daemon stop by event overflow at about 64975 frames

This might not be optimal, but as workaround you may try using system memory rather than NVMM memory as nvjpegenc input:
nvarguscamerasrc → nvvidconv → video/x-raw,format=I420 → nvjpegenc → …
Seems the 16 bits overflow issue only bites in NVMM input branch.

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