It seems that it is impossible to have the VMGM menu loop without resorting to ugly hacks: inside the <pgc> for the <vmgm>'s <menus>, I put <post>jump vmgm menu;</post> but dvdauthor just spits out
ERR: Cannot find PGC with entry
ERR: in VMGM pgc 0, <post>
It's not a big deal, because I've worked around it by jumping to the titleset menu, which then jumps again to the VMGM by default.