I just noticed on my phone that at some point this important feature was restored. At the time, for me, the dealbreaker was that thumbnails were no longer using whatever frame a given video had stopped on (I like being able to choose my own thumbnail). Lucky for me I noticed this before updating and decided install VLC on my iPhone to monitor the app’s rehabilitation while continuing to use the non-screwed-up version on my iPad, where my video library lives.
A few months ago there was a VLC update that made your users go ballistic.