We are experiencing a similar issue as described originally. The users session 'freezes' on the client side. If they reset client and reconnect, they have a 'small screen' and device manager shows the display drivers in a <!> state. Disabling and re-enabling the drivers fixes the issue with a subsequent session reconnect. 

The odd thing is that this started happening to us when we were still on ESXI 6.7 and Horizon 2006, sometime around early March after patches were applied in February. We upgraded to 7.0u3 in April/May and the issue has only been getting worse with time.

I have a case open with support but they a refusing to move forward with log analysis because our Windows thin clients are not certified for Horizon 2111 - even though they are just Windows 10 machines running the latest Horizon 8 client!