Hey,
I'm using latest 16.2.4 build-20089737 VMware Workstation and running Windows 98 SE as guest on Windows 10 host.
The graphics look OK for the most part, but if I scroll any window, or drag the Office Assistant in Office 2000 I get major graphical glitching. It occurs when dragging windows with "Display window contents while dragging" on, and on scroll lists.
Latest VMware Tools are installed, 3D acceleration is disabled.
I tried in on another Windows 98 VM and the same thing happens. Doesn't seem to happen on Windows XP and up guests.
Forcing a redraw with minimizing and restoring window helps, but it's tedious, because it happens often.