Conversion takes place in the "cloud" and it takes between a few seconds and a minute. The delay comes when Moodle goes to pick up the recorded file. Rather than have the user wait for their recording to finish converting, we schedule Moodle to go and pick it up its ready.
The timing of that pickup happens in 2 ways:
i) When your server's Moodle cron job runs we pick up any newly converted files.
ii) We send a notification to your Moodle that a file is ready. Moodle checks it truly is a file its waiting on, and then goes and picks it up.The notifications are really reliable and so most of the time the file is back with Moodle in 15 - 30 seconds. Cron is really a fallback.