It is a known gstreamer 0.10 limitation which is fixed in version 1.x .
On the fly converting for a stream won't work I guess.
I would suggest waiting for Jolla releasing GStreamer 1.4 for SailfishOS. First steps were already done in update 10. I hope update 11 or 12 will bring a full replacement for 0.10 including support for the camera.