YES! THIS!
I was trying to write an exam the other day that required me to use Linux in my VM. This happened to me about 6-7 times resulting in me having to reboot the VM and have to set up the exam over and over again.
Everything continues to run in the background on the VM. I can see the Network activity and CPU activity continue, but the mouse and keyboard stop working. Trying to switch to another TTY doesn't work, and I can't send ctrl + alt + delete either.
I was also running on Windows 11 on VMWare 17.5. CPU is a Ryzen 7 5800X, so it's not a CPU architecture issue.
