VLC doesn’t seem to be playing nicely with this for me (it does not like Blu-rays with menus). I did my testing on PS4, PS3, PowerDVD, and Total Media Theatre. Your vlc may be set up better than mine, though.
You can definitely watch the m2ts files in VLC. But everything up to and through the crawl is a separate m2ts. So you’d need to click the next one when it’s done, or make a playlist or something. Or wait for an MKV. 😃