Ok so I removed this line from the org.videolan.vlc.desktop file and renamed the file as vlc.desktop then restarted the OS.
This now works correctly, the context menu holds 1 copy of VLC and that copy opens correctly.
Thanks for your help here!
Edit: For future readers of similar issues; the vlc.desktop file is located in home/.local/share/applications there are many .desktop files here which are for other similar relationships on the OS.