It gets all pixelated and yes video can stop.
On my 580-023 with a RTX 2080 I was able to install Klite drivers which deinstalled the LAV drivers. Then it worked fine. I could see prior to this from Task Manager that the GPU wasn't doing any decoding.
However on my PC with a GTX 1080 it didn't help to install the Klite drivers.
It doesn't let me play H.265 files at all. If I select H.265 it reverts to H.264.
I have HEVC installed. I have also completely removed GPU drivers with DDU and installed new, with no improvement. Still can't play H.265 from SLR.
My PCs with 2070 didn't have Klite drivers installed and yet they are able to play H.265 just fine.