On the FalconChristmas site a year or so ago, I posted a picture of me using a webcam program I was playing with on the Pi that allowed this feature but I haven't refined it enough for release. It captured live video from a video input and displayed that on a FPP Pixel Overlay so it could be on a regular matrix, virtual matrix on HDMI, or on a "P10"LED panel matrix. I hope to work on it some more this year so it is usable for this season since a lot more people are using P10 panels this year.
This is where DVI mapping with matrices works great because you can map your computer screen to the matrix and that means you can play live feeds easily. If I remember correctly, LOR, LSP and XLights require a pre recorded file for video to be used
The old fashioned way is to make a series of still pictures and display them. I did a short video on my mega tree and it looked really bad. Not enough horizontal pixels to really see it. For xlights, this post tells the story.