I have installed Wmware Workstation Pro 16.1 on Windows 11 22H2

I have created a VM with Windows 7 and I am attempting to install Vmware Tools to improve performance.

I tried the default option from the context menu as well as installing manually via Wmware tools ISO and via the EXE installer - all to no avail. When the installer is started, Windows 7 errors with "vmware installation launcher has stopped working"

I installed the updates mentioned here: https://communities.vmware.com/t5/VMware-Fusion-Discussions/VMWare-Tools-fails-to-install-Windows-7/... as well as I also installed all available Windows 7 updates.

Here is information from Event Viewer:

I already wasted 2 days to fight with this. Any suggestions how to resolve?