Alsa Audio Output works fine from terminal, e.g.
But I got to change from default to Alsa Audio Output in vlc. I found it in Tools > Perfernces > Audio > Outputs.
The issue is that when I change it to Alsa, I Loose all sound. When I leave the default I get an annoying Audio delay of about 200ms or 500ms. From what I have found you have to use Alsa Audio Outpu to fix that issue.