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Ok this is correct for traditional JPEG. Other flavors like Jpeg2000 use a similar (but lower overhead) version of this byte-stuffing to avoid JPEG markers from appearing in the compressed stream.

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I remember there was a guy on compression forums who was very annoyed at this waste of coding space. If you're doing compression, shouldn't you make sure every encoded file decodes to a distinct output? He thought so, and made bijective versions of Huffman coding, arithmetic coding, LZ coding and (even more impressive) the BWT transform known from bzip2.

He was a bit crazy, but I liked that guy. Rest in peace, David A. Scott. Maybe there will be new uses for making all compression bijective over all byte streams.

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