I think I've found the answer,and it looks like an issue that has nothing to do with vmware. I've found multiple other examples of non-virtualized users having same problem.
Proposed solutions:
"TLDR: Make sure your PCI Express Link State Power Management savings mode is set to off! After changing this all my issues went away switching also by switching from Balanced to High Performance profile which changes this setting for you. https://www.sevenforums.com/tutorials/292971-pcie-link-state-power-management-turn-off-windows.html
Additionally just to ensure this I also set NVIDIA's root USB controller to uncheck "allow the computer to turn off this device to save power". I also moved the device to a powered USB hub. https://felixwong.com/2015/03/solved-microsoft-wired-keyboard-200-disconnects-and-makes-usb-connecti... "
Neither of the above actually solved the issue for me. But the following did:
Nvidia control panel, Manage 3D settings, power management mode --> prefer maximum performance.
Presto, stutter gone. Including choices 1 and 2 because they seemed to help many other people with similar issue.
With this fix, the RTX gpu's are very convenient-- each VM has its own USB-c controller built in.
Another (no longer needed) workaround: https://www.virtuallyghetto.com/2020/05/how-to-passthrough-usb-keyboard-mouse-hid-and-ccid-devices-t...
but see all the comments to that article for the "fine print" that actually makes it work. I found that answer worked for mouse and keyboard but passing through a USB audio controller gave me massive lag. Can do audio over HDMI from the gpu instead though. I much prefer passing through a whole USB controller, much simpler to do.
LT