Judging from an intense five-hour scour of a zillion Internet sources, it looks like v3.x.x of VLC changed (broke!) multi-item-playlist streaming. When commanded to stream a list of multiple items, only the first item makes it through to the "source" specification page, let alone to the Playlist -- and even if other items are added to the Playlist after streaming has begun, "streaming-ness" attaches only to the first item on the Playlist -- all the other items play locally, and when play circles back around to the first item (or it is reselected manually), a whole new instance of the stream is cranked up and THAT ONE ITEM is streamed again. Internet anecdotes support my impression that "this used to behave differently."

So if whatever YOU guys are talking about, simply takes a stream feed from VLC and does something else with it, and your problem is that suddenly you're only getting one item and then you lose the connection -- this is why. VLC is closing/deleting the stream -- the very ports on which you connect to the stream! -- at the end of the FIRST ITEM in the playlist.

I don't know of any other solution besides keeping a copy of VLC 2.x.x around for this purpose, and hoping all future versions of Windows (or Linux, or whatever) continue to be able to run it. I'm planning to TRY to take this up with the VLC people, but I don't have much hope: if they haven't fixed it by NOW, they might have their own reasons NOT TO.