VLC sucks ass when you want to do any type of live transcoding or remuxing without setting up a video stream. Especially with multichannel audio:

This has been an issue ever since feature added, the maximum bitrate you can set is 512 kb/s on every codec, despite codecs that support more.
The bug thread for this was basically "stop complaining about our shit UI and use the CLI"
Much prefer Kodi for this purpose, and an ffmpeg based player for lightweight stuff.