In the anime fan subbing community (which this document is likely from), it's very common to hate on VLC for a variety of imagined (and occasionally real but marginal) issues.
At least for the real part there was the great 10-bit encoding "switch off" at around 2012 where it seemed like the whole anime encoding scene decided to move into encoding just about everything with "10-bit h264" in order to preserve more detail at the same bitrate. VLC didn't have support for it and for a long time (+5 years?) it remained without proper support for that. Every time you tried playing such files they would exhibit corruption at some interval. It was like watching a scrambled cable channel with brief moments of respite.
The kicker is that many, many other players broke. Very few hardware decoders could deal with this format, so it was fairly common to get dropped frames due to software decoding fallback even if your device or player could play it. And, about devices, if you were previously playing h264 anime stuff on your nice pre-smart tv, forget about doing so with the 10-bit stuff.
Years passed and most players could deal with 10-bit encoding, people bought newer devices that could hardware decode it and so on, but afaik VLC remained incompatible a while longer.
Eventually it all became mutt because the anime scene switched to h265...
8-bit and 10-bit almost give digital video too much credit. Because of analog backwards compatibility, 8-bit video only uses values 16-235, so it's actually like… 7.8 bit.
It's nowhere near enough codes, especially in darker regions. That's one reason 10-bit is so important, another is that h264 had unnecessary rounding issues and adding bit depth hid them.
Mostly that VLC has had noticeable issues with displaying some kinds of subtitles made with Advanced SubStation (especially ones taking up much of the frame, or that pan/zoom), which MPV-based players handle better.
Note that, while I haven't had time to investigate them myself yet, IINA is known to have problems with color spaces (and also uses libmpv, which is quite limited at the moment and does not support mpv's new gpu-next renderer). Nowadays mpv has first-party builds for macOS, which work very well in my opinion, so I'd recommend using those directly.
