Actually this is not a VMWare issue, it is a GEforce issue. See the note below from NVidia.
What class of virtualization is supported on GeForce GPUs?
GeForce GPU passthrough supports 1 virtual machine. SR-IOV is not supported on GeForce. If you want to enable multiple virtual machines to have direct access to a single GPU or want the GPU to be able to assign virtual functions to multiple virtual machines, you will need to use NVIDIA Tesla, Quadro, or RTX enterprise GPUs.
I'm not sure what has changed. I don't recall enabling 3D support but when I started getting this issue I checked the setting and there it was. I did recently update my Geforce drivers and it's since then that this has happened. I'm wondering if the driver change has allowed that setting in VMWare to be recognised and thus now won't allow multiple VMs with 3D graphics enabled to be run. It's kind of understandable really considering with the GPU is doing. NVidia to say that if you want to run multiple VMs with 3D graphics you will need to run the Quadro class or better GPUs.
