I tested out what you said, and I got the same problem even at 10s.
Alternatively I tried something else that worked for me, a loop back stream with a delay.
Go to 'Settings'->'Preferences...', then 'Stream Output'->'Access ouput'->'UDP', check the 'Advanced Options' checkbox. You will then see caching value in ms edit box, change it to 45000. Save.
Now 'File'->'open capture device...', choose your device. Then in 'Advanced options', check the 'Stream/Save' box. Click on 'settings'. For 'output' check 'UDP', put the UDP address 127.0.0.1 (you might not need to), then choose a video codec (I tried mp4v as it was default). If you want audio, you will probably need an audio codec (I didn't though). hit okay. This will stream the video to yourself.
Now Open another VLC, 'File'->'Open Network stream...', make sure UDP is selected, then click ok. And this one should recieve the stream (might take 40 or so seconds, depending on how fast you did the other stuff
) but this works for me.