Render settings are intentionally separate from the output module settings.
Ae renders the comp according to the render settings, then passes those frames to the output module(s), which handle cropping, resizing and compression. You can have more than one OM on each render item with different settings, which is a very useful feature in many different workflows.
Working in 16b or 32b and outputting an 8b format will force Ae to dither upon output. This can help reduce banding in some circumstances, versus working and outputting in 8b only.