An INPUT_TYPE_DIRECTORY might not match with an MRL supported by the CoreFoundation API. The code handling the file browsing is made for local file browsing at locations that are not exposed by services discovery.
Ensure file:// is the scheme used for the MRL to trigger this browsing code. This is not 100% compliant since it doesn't account for a demux but there's probably no reason to have a demux there, and no occurrence to that day.
This avoid bypassing the vlc_media_source/media_tree preparsing when the source has been reported as INPUT_TYPE_DIRECTORY.
VideoLAN code repository instance