Its all up to Android what happens when playing through Bluetooth, applications don't do anything special. I imagine it recompresses it into one of the codecs that the Bluetooth audio profile specifies, either SBC, MP3 or AAC, with SBC being the only mandatory codec. You should probably read up on Bluetooth A2DP if you want to know more. Bluetooth is not high quality audio, and never lossless, because of extremely limited bandwidth.