You are not doing anything wrong. Window Media Player is a strange DLNA client since it requests special hardcoded playlists that Mezzmo server does deliver back to it so that it works with Windows Media Player. These special playlists are not directly represented in your Mezzmo library as a playlist or folder so that's why it is bypassing any playlist permissions settings.

If you want to deny computers on your home network accessing your Mezzmo library, then the easiest way is to do this in the Media Devices dialog. For any device that is listed there, you can select it and click the "Deny" button and Mezzmo will not allow it to access your Mezzmo library.

Another way to do this is once all the devices you want to access your Mezzmo library are listed in the Media Devices dialog, then stop your Mezzmo server and delete any devices form the list you don't want. Then, uncheck the "All all new devices to connect to Mezzmo" checkbox. then start your Mezzmo server again. This configuration will stop any new device from being allowed to access your Mezzmo library, but allow your preferred devices to access it.

Hopefully this helps what you want to do.