Update....

I think the issue is caused by UEM or APP Volumes ...

I removed the App Volumes agent and the USB label Printer gets installed fine.

There are a lot of USB redirection related issues being reported by the community , I have not been able to address mine.

I have two cases open with VMWARE and so far the one suggestion given to me did not work ...

"Can you please try to
create a DWORD value “ProcessDriverStore” and set it to 0 under
“HKLM\System\CurrentcontrolSet\Services\Parameters” on the base image and then
see if that makes any difference for Dymo Label Printer after a new snapshot
and recompose"

Any one has any input?