The VideoLAN Forums

Tbh, it shouldn't say iOS anywhere. If it does, I'd love to know where and fix it (this is a syntactic problem only and doesn't affect the usability in any way).

Select About this Mac from the Apple Icon.
System Report
Select Applications under the Software section
Right hand column named Kind

CPU varied between 11 to 15% while viewing a 720p MKV in full screen

I tried both of your scenarios multiple times and did not experience any problems. I shut VLC down from the dock many times. I also pressed ESC while in full screen movies multiple times.

MacOS 11.1 on Mac Air M1
VLC 3.0.12.1 Vetinari (Apple Silicon)

Why does MacOS report this build as an "IOS" app and not "Universal"?

Select About this Mac from the Apple Icon.
System Report
Select Applications under the Software section
Right hand column named Kind