What is this "Auto-protect snapshot" feature? I'm looking through all UI options, as well as searching the help/user manual and find nothing regarding it.

It is a VMware Fusion feature. As far as I know, it is not an option for VMware Workstation. If it is -- and I don't believe that it is -- I cannot find it, even in string form, in any of the linux code.

But if anyone wants automatic snapshots, just use the cron task I mentioned. You could even write a more sophisticated script to manage how many snapshots would be maintained that way.