> rgb_byte_jpg_trans.tif is a valid cloud optimized GeoTIFF
> I expected the image to be "cloud optimized" at step 2. Why do I need an
> additional translate?
Because gdaladdo will add the overview IFD at the end of the file, whereas in the definition of cloud optimized GeoTIFF, they must be all at the beginning of the file so as to be efficiently fetchable. And that can only be done with gdal_translate -co COPY_SRC_OVERVIEWS=YES
To avoid quality loss you should only use JPEG compression for the final gdal_translate stage.