Here is what FINALLY worked for me:
I originally tried the Microsoft method, which is with VM powered off, go to settings, 1) encrypt VM then 2) add TPM only to find no option for adding TMP because of lack of UEFI. Then looking at advanced settings, no way to change the firmware boot settings to UEFI, because I am legacy and need to go from MBR to GPT.
So to get UEFI option, I used mbr2gpt.exe/validate and mbr2gpt.exe/convert. Closed out command prompt, shut down PC.
Then I removed the encryption via VM settings and PW input, and went to the .vxm config file ( via option key, right click on VM in virtual machine library, edit config file) added
firmware = "efi"
uefi.secureBoot.enabled = "TRUE"
to the config file, and then shut down VMware again and restarted.
At this point, I was able to start the PC (Virtual machine) and do the health check again. This time I HAD safeboot, but still no TPM. So I shut down the VM again.
Next, before adding the TPM via advanced settings, I had to add back the encryption, so I did that via settings and PW.
Only THEN could I go to settings, add device, TPM, and it actually had the option to add it!
Then I ran health check again and VOILA, this computer is set for a free Win11 upgrade! BOOM!