I took a look at what VMware did in the tool that they use to create "bootable macOS media from the Install macOS ... ,app."
What I see makes me doubt once again how Mac-savvy their engineering staff is.
The script from GitHub.com takes a very straightforward approach that's the same as what @taylorcurtis posted - use the Apple-provided createinstallmedia application within the application's bundle and target the output to a disk image file instead of a physical device. They then use macOS hdiutil commands to create an ISO out of that DMG file.
VMware tries to do something similar, but for some inexplicable reason (perhaps for backward compatibility or lack of effort to keep up with what Apple has done) tries to create a .vmdk file using their own code instead of Apple's utility. That process is dependent on extracting and copying what they think should be the files contained in the contents of Apple's installer bundles. Apple appears to have made changes to the contents of the installer bundle that VMware's tool doesn't recognize. So, the process fails.
Perhaps VMware ought to take a good hard look at what this script does and realize they need to seriously rework that tool and not just try to "patch" around it. This has obviously been broken ever since Big Sur was released (and I bet it is due to Apple changing things up to support Apple Silicon).