In short, the DVD-Insert event causes MP to *always* play the DVD in the first device, despite which device caused the event. Therefore, MP will always play the DVD in the first drive, despite an ISO being clicked, or secondary media is inserted.

TO REPRODUCE:
Insert a DVD in your physical drive, decline the playing of that disk. Use the Daemon tools feature of MP to select an ISO (effectively mounting it and giving you the "Play DVD" option). Notice that instead of playing the ISO, the physical DVD is played.