If I had to make a guess they're taking a stream from some embedded system with a camera on board the starship, downlinked to a system running VLC at the test site, and that system is being used to perform some form of on the fly transcoding or resizing, feeding video out to a live editing/mixing setup (how they're accomplishing the picture-in-picture of inside the rocket skirt and exterior camera at the same time).
VLC can do all sorts of stuff that 99% of its users never touch, if they're just playing files.