"Playlist PFL" means pre-listening to the entire playlist, not only the selected item. Internally, a temporary container of all playlist items (except for those that are not cue-able, i.e., streams) is created and then loaded into the PFL dialog. You can then easily listen to the segues the automation would play later.
To PFL a single item (be it a container or an ordinary item), just use the ordinary Extra PFL command (which is now only labeled "PFL" in the popup menu, as I'm beginning to dislike the term "Extra PFL").
When multiple items are selected (with Shift or Ctrl), the "PFL" menu item will turn into "Selection PFL", and a container is created of the selected set of playlist items, and then PFLed in the same way as Playlist PFL.
Any suggestions regarding a better terminology or behavior of the menu items are appreciated.
Regarding the ID3/MMD conflict, MMD is supposed to take priority. I will have a look at the source code, perhaps there's a bug.
Torben