Using MPEG-TS output filters (or other similar alternatives) to deal with source MKV files using Transport Streams.

Extracting the video track from the MKV file using video demuxer tools such as MKVToolNix and the likes.

Converting MKV to MP4 using video conversion software such as Handbrake and the likes.

Too bad that Vegas Pro never officially supported it, thus forcing me - as well as many other videomakers - to adopt many tedious and uncomfortable workaround, such as: Among the many reasons for its success there is the fact that Matroska is entirely open in specification, with implementations consisting mostly of open source software. Originally released in 2002, the Matroska container has quickly become the de-facto standard for storing common multimedia content, like movies or TV shows, vastly beating AVI, MP4, FLV, OGV, ASF and all the other viable alternatives in terms of adoption and popularity. One of the few problems I had during my countless video editing sessions was related to the MKV format, also known as Matroska: a free, open-standard multimedia container format that can hold an unlimited number of video, audio, picture, or subtitle tracks in one single file. I've always considered this software the best video editing software package for non-linear editing (NLE) available, and I'm still using it these days. I've been using Vegas Pro since version 9.0, when it still was known as Sony Vegas Pro, hence way before its acquisition by Magix GmbH & Co.

Vegas pro v18