Smart playlist based on a playlist
I've run into the same problem and I too have narrowed it down to the "playlist is xxx" criteria.  Live updating works for every other criteria I have, but it doesn't like either a reference to alpha text or the reference to another playlist for some reason.  This seems to be a bug with iOS 8.4, because it worked fine for me before the update.  (I think it has more to do with the use of alpha text because I ran into the same problem when I tried to use "category is".)

I have figured a work around.  Not the ideal solution, but it works for me.  


I took a field I never use, in my case BPM, and cleared it out for all songs in my library.
In standard playlist XXX, I entered "1" in the BPM field for all the songs in that playlist only.  
Then in my smart playlist I add the criteria "BPM is 1".  


This works.  It draws only from songs in the standard playlist XXX, and live updating works as it should on the phone.

The only thing I have to remember is to clear the BPM field when I delete a song from standard playlist XXX.  

Hope that helps.  And I hope Apple fixes is this in their next update along with some other annoying smart playlist issues I've encountered.