Let's start with the screenshot. That could be because there's no VIDEO_TS folder in the root directory of the DVD with a VIDEO_TS.IFO in the VIDEO_TS folder. It could also mean a corrupt input, which appears to have happened here. You said in one of your answers that VLC does not play the contents correctly, but I'm guessing you mean the DVD? Because I thought you said the VIDEO_TS folder on your HDD did play in VLC.
I've not used CloneDVD beyond a trial some like 15 years ago, so I didn't know it also burned output. Yes, there are things that can burn the output of other converters. For instance, I use ImgBurn, which can create DVD's from existing VIDEO_TS folders like those created by AnyDVD.
It's highly unlikely your region code got reset by anything because that requires user acknowledgement of the change. It's a hardware setting change in your DVD drive. It can't be changed unless you okay the change. That being said, if VLC is not playing back the VIDEO_TS folder on your HDD correctly, then that's probably the answer. Without the proper region code set, depending on the DVD, an incorrect region code could result in decrypted VIDEO_TS content that won't play back properly.
After setting the region code and making SURE you changed the region code WITHOUT AnyDVD running, try decrypting the disc again with AnyDVD and see if you get better results.