Yeah the way Pavtube copies the disk it should strip the region information out. That's why I'm so confused.
I tried MPC-HC and it gives the same error. "This Disc is not formatted to play in this region" when attempting to play from the mounted image using virtual clone drive.
Interestingly enough, when i pointed MPC-HC at the VIDEO_TS directory (File --> Open Directory) the content played as expected....
I'm totally lost on what could be the problem, or where the breakdown is happening. Pavtube (seems not it's playing from the Video_TS directory and as stated above the ImgBurn software shows the content is region free), ImgBurn (I wouldn't think so it's it just creating an ISO out of the image we point it at?), or Slysoft Virtual Clone drive (not sure, checked the region settting in System Information --> Device Manager --> DVD Region Tab and it shows the correct region).