Thanks for sharing your file privately. Use this version and there should be no issue.
For smooth preview play, allow the green line above the sequence thumbs to complete and audio to cache. This can take a few minutes.
Also suggest not loading MTS 2, as it's not used, and unlinking/deleting the disabled audio track.
An unneeded snippet of video at the end of track one causes a jump cut, so it can be deleted.
There is considerable dead space beyond the end of video. To eliminate it, click the red cursor at the project's end. then click the blue bracket that pops up...
All those changes have been incorporated into a revised VPJ file that you can download from the link provided in the PM. Double-click it to load the project.
