To get it work you have to meet both requirements which means
1. Mark the checkbox when setting up the USB device for VM use
2. Make sure both Hosts can reach each other
3. Dont reboot first Host
Using USB within a VM doesnt mean that you have to use PCI Passtrough. This was a hack from vSphere 4.1 times (around 2010) when support for USB was only half implemented in ESXi.
Regards
Joerg