Andy comments: I've run that setup and sometimes I see the copy protection and sometimes I don't,.... I suspect that some DVDs are copy protected and some aren't. If a person is using a his own DVD to make his own copy off-air, it won't have copy protection. Then, the playback is run to the VCR inputs and the Channel 3 output goes to the NTSC television... and it should work OK..
When VCRs quit, it's usually (in my experience) the transport mechanism. The other stuff is still workable, and using it as just an RF modulator should be very practical, unless you are playing back a store bought, copy protected DVD....... The broken VCR certainly has very little other practical use. Andy in Eureka, Texas