The VideoLAN Forums

No.

So does this mean the feature hasn't been implemented? or there needs to be more active testing of it?

This is no undocumented flag. It's just that VLC didn't support this flag until recently. We added support for this in the current development versions, so these files will be playing nicely (finally!) in the next major release of VLC (2.1 or something). I just downloaded vlc-2.1.0-20121016-0403 fr...

any progress on this?

I would really like to see VLC honor the rotation flag on iPhone 3GS videos.