Whose idea was it to implement a PiP mode with the crippling limitation that you cannot have video playing in both the active app and the PiP window?
I spent about 20 minutes futzing around with VLC on my shield, and was able to get our baby monitor in a PiP window - but the moment you start any media application it abruptly closes the window
Who is this feature for? The 1% of folks who play emulators or games on their Android TV and want a show/movie playing in the corner?
Such a wasted opportunity.
Perhaps the feature is a stepping stone to implementing exactly the use case you describe. I have a feeling that chipsets out in the product space may not have enough power/resources to decode two video streams at the same time, so Google is slow-rolling the implementation of the feature. Though .. I would figure that the Shield would have enough power (or maybe their video decoder/compositor hardware can only handle one stream at a time..?).
The PIP feature as it is now could be a 'wink wink nod nod' to product makers to tell them they're going to need to support it eventually. It wouldn't be the first time Google's done something like this.
Here's hoping, at least.