Which is a very common feature, even YouTube can do it if you press "," (or the button next to "M" I guess)

Edit: mentioned frame interpolation, but seems like it was about something else; being allowed to go one frame backward

The OP means to be able to play backwards frame by frame, which I believe VLC can't.

To be fair, technically speaking this isn't nearly as easy as step forward due to how codecs are constructed, but lots of players have this feature already.

> frame-stepping backwards

That's not frame interpolation. Just being able to step back one frame at a time.