I only see a momentary pause on my dev machine (which is high end) - not sure why it can't loop seamlessly though. Could you test r256 as well? It's always useful to know the specific release that started exhibiting an issue.
I'm on a fairly powerful machine as well (i7-7700k 4.2GHz, 64GB RAM) so I also find the pause surprising.
In r256, I'm seeing a SLIGHT pause in the longer/larger video, but nothing as severe as r257.3. Both r255 & r256 pause for about half a second, r257.3 for far longer, with the test .capx above.
It's possible that it's due to the compression settings the videos use, but won't have time to test other settings until this evening EST, as .ogv & .mp4 are exhibiting much less of a delay than .webm, and the .webm file is much larger. Will update here with more info then.
UPDATE: It's looking like the issue may be due to using large, long video files. I don't have time to update the .capx right now but you can probably close this out as a minor issue; re-exporting the longer video with different, lower-quality (but not significantly lower visually) settings reduces the delay quite a bit, though there is still a slight delay when it loops that causes a visual stutter throughout all on-screen elements.
An interesting side effect of the initial delay before the video starts playing is that it also prevents streaming audio from starting until the video has started.