After searching around, I found this bug in Bugzilla related to <param> tags:
To separate the parameters embedded into the tag from <param> tags, a parameter named "PARAM" with a null value is placed between them. However, mplayerplug-in is programmed to stop reading values after running into a parameter with a null value. (mplayerplug-in/Source/plugin-setup.cpp:550) So it turns mplayerplug-in was getting the parameters after all; it just never got to them.
This also means you can remove my patch from the extension, as it is no longer needed.