While I appreciate the response, I think you're assuming too much about that converter. The converter works both ways despite being marketed as VGA-to-HDMI.
It is that you claim that its working, or I would never guessed! Its technically almost impossible for such an adapter to "work both ways", and it is labeled very clearly VGA IN
and HDMI OUT
. Is there a switch on that box that is used to switch it from HDMI=>VGA to VGA=>HDMI I wonder?
Anyway, if I am forced to conclude it seems to work, then it seems that even though it has its own power supply the adapter still seems to draw power from the PI, which is bizarre because it would only do that if the PSU of the converter outputs at least 0.2V less than the PSU of the PI (due to the diode in the PI).
Maybe that removing the diode of the PI (D1) will help against that. Or maybe the PSU of the adapter is failing to deliver 5.0V.
Also whenever you are NOT connecting a real HDMI device, the PI cannot read out the monitor specifications of the (HDMI) monitor, so its necessary to edit config.txt to set a specific display resolution the PI will then use.