[DarkHelmet]

Works for me, tested with this playlist:

Code:

friday.mp3
video.avi
friday.mp3
video.avi
friday.mp3

Edit: Ah I see you talk about smart playlists. The PR fixed static m3us that have mixed content, means: m3u with video and audio stuff mixed as seen above.
Edit2: And perhaps to add the GUI part seems totally broken. If you open the m3u via Music, you only get music and when you do it in Video, only the video. I did it the following: /usr/local/bin/kodi playlist.m3u here it works correctly. But definitely more work is needed. 

 I tested with a m3u playlist, opened from within music.