I am trying to create a HEVC Fairplay stream. Does it support aes-128 or sample-aes encryption in EXT-X-KEY:METHOD?
The specification allows for both, the classic whole segment encryption and SAMPLE-AES.
Note that SAMPLE-AES is somewhat different between MPEG-TS and fMP4.
You might want to study https://tools.ietf.org/html/rfc8216#section-220.127.116.11