After 30 minutes or so, guest audio no longer functions when connected via RDP to host.
If i go back to VMware and connect to guest, audio resumes and then i can reconnect via RDP with audio operational.
Sometime later, no more audio.
I found several audio event errors (the timing coincides with the dropouts):
The Windows Audio Device Graph Isolation process (audiodg.exe) has terminated unexpectedly.
Process Exit Code : 0x0xC0000005
What is the audio device of the Win 8.1 guest?
I don't have a Win 8.1 guest VM, but on Windows 10 VM, the audio device is "VMware VMaudio" which would then be using a VMware audio driver installed from the VMware Tools. I think Win 7 guest VMs tend to be created with sound.virtualdev = "hdaudio" in the vmx and this causes the Win 7 guest VM to use the Microsoft High Definition Audio device driver.
So if it is a Microsoft High Definition Audio, it may not have anything to do with VMware itself and it might then be a purely Win 8.1 audio issue via RDP; that it just so happened that the RDP host is a VM.
I've found a workaround by changing the RDP settings to not redirect audio to the host. Now on the guest it shows the Audio device as the actual device on the host. Previously it was showing some Microsoft generic device. I think the issue was with redirection, but again it's only specific to redirection of a VMware win 8.1 guest. I use audio redirection via RDP for other systems and it works fine.