The BSOD on the host appears to be related to DirectX Graphics. When 3D acceleration is enabled on the VM, by default, VMware Workstation will use DX11 of the Windows 10 host as the render engine for the VM. The Nvidia control panel default graphics processor setting is just to ensure the more powerful GPU (Nvidia) is used all the time. You could try setting it to Intel just to preclude whether it is an Nvidia only problem or not.
I haven't used much of Windows 10 2004 (upgraded from 1909) as a host OS. The short time that I have had to try with VMware Player is that when the "Reputation-based protection" was turned on in "App & browser control", it started blocking VMware-related services as a VM is powered on. If that is turned on, you could try turning it off.
How much graphics memory was allocated to the VM? Max is now 3GB, have you gone with the recommended 1GB? Is the VMware Tools of the VM up-to-date? Can you attach (at the lower right hand side of this reply box there is a link to attach files) the vmware.log of the VM?
Another alternative is make VMware Workstation use OpenGL instead of DX11 but it is unlikely to solve the problem if the cause lies somewhere else. On Linux hosts, OpenGL 4.x is used for 3D acceleration enabled VMs in Linux hosts.
This can be done by adding the following lines to the VM vmx configuration file.
mks.enableDX11Renderer = "FALSE"
mks.enableGLRenderer = "TRUE"
In the past, I have tried using the GL renderer with Intel HD graphics on Windows 10 host leads to rendering problems in a Windows 10 VM but seems OK with an Nvidia GPU.