Mouse pointer location not correct

[oaklodge]

VMWare Fusion 12.1 installed on latest public OSX Big Sur - Guest also Big Sur

I only have the problem in OSX Guest (Windows and Linux guests are working correctly)

Hardware Version is 18

In the OSX guest the pointer location is wrong - seems to be offset by about  4mm towards the top left corner.

Any ideas on a solution please?

[oaklodge]

After a little more investigation this issue is related to the setting "Use full resolution for Retina display" - if this option is enabled the offset problem presents, if I disable this option the mouse location is correct, however everything looks fuzzy so it's not a solution.