running Fusion 11.5.5 on a 16" MacBook Pro with Catalina 10.15.5 as both host and guest, audio input device in guest is selected as "Optical digital-in port", audio input device in VMware settings for this VM is a USB headset which is connected to to the MacBook Pro via a simple non-Thunderbolt USB-C hub, the same hub to which are connected a USB mouse and keyboard, a 1440p display, an Ethernet cable which I am currently not using, and the original Apple charger for pass-through charging, the audio input often, but not always, sounds very distorted, even when just using Quicktime Player in the guest to record a few seconds of voice, it sounds a bit like a very low bandwidth robot voice, understandable but not nice. Sometimes the voice is fine for a couple of minutes.
Any ideas on how to solve this issue?
PS: VM has 4 CPUs, 8 GB RAM, and performance is otherwise fine, I can play a YouTube video using about 1280x800 pixels in a Safari in the guest and while it's not quite perfect it's mostly fluid with small hiccups every couple of seconds.
Try reducing the number of cores in the guest. I find on my 6-core 16, that anything over 3 seems to cause stuttering.
The other thing you can try is to connect the USB audio device directly to the guest, instead of having the audio pass through the virtualization layer.
Just tried directly connecting the USB headset to the VM on the USB layer, it is recognised in the guest and no longer available in the host, however neither sound input nor sound output actually work. Now I'll try connecting as VMware soundcard again but reducing the guest to 2 cores.
For the record, attaching the headset directly to the computer (just with a USB-C to USB-A adapter) instead of via the multi-port USB-C hub slightly improved the situation in that recording audio with Quicktime Player now pretends to sort of work, albeit very jumpy, but it neither records nor plays back anything; Youtube video doesn't play at all.
So for Youtube, catalina guests won't have 3d acceleration, so if the browser you're using expect it, that'll fail.
For the rest, afraid I'm out of ideas - MacOS guests are touchy things (the OS wasn't designed to be virtualized).
Also experiencing this issue. Audio is disorientating on optical, and when attempting to use a USB headset, no input/output plays, and streaming services such as youtube freeze. I tried the suggestions below, such as dropping CPU cores, RAM, but with no luck. I've been using Audio hijack to listen to my own recordings, and oddly enough, it seems like 1 out of 10 tries, I was able to record clean audio, with only an initial blip at the beginning. I've still been digging into this, and would appreciate any guidance or suggestions.