As far as i could tell it does. I was directed to the software from some suggestion somewhere on the internet for that purpose.
When you choose to add a 'Live Video Source', you have 3 options; webcam, IP Camera (MJPEG), IP Camera (RTSP). This is what leads me to believe the software supports ip camera RTSP streaming in some capacity.
I have since tried using 'Flash Media Encoder' and it presents the 'exact' same dialog window when i configure the RTSP settings, with both windows mentioning the copyright of 'moonware studios'. Moonware Studios from a quick google make the webcam7 / web