Hi bluefirestorm!
I tried the parameters you mentioned, and although it is true that the built-in SmartCard reader is unable to be shared any longer, it also means that the SmartCard reader disappears completely from within VmWare. Previously it was Shared, but now there is no mention of the device.
My guess is that VmWare is only able to take control of USB-devices, not built-in PCI-devices inside (in my case) a laptop.
It might be that the only way of solving it might be to give VmWare sole access to a PCI-device, but I am unsure if that is possible in VmWare Workstation.
/ Arne