I was going to do a test record to see if I could duplicate the problem but after customizing the interface to include the record button VLC crashed and won't reopen. Going to restart and see what happens. Will be back with the results.
Edit: Had to uninstall and then reinstall to get VLC to work. I selected an .mp4 file and recorded about 30 seconds of it. I opened the saved file and had audio and video. I did not change any of the settings. One suggestion I have read is to disable video acceleration before recording. This can be done by going to Tools> Preferences> Video> remove the check beside Accelerated video output (Overlay). You can try that and see if it helps.