With a virtual machine, you have the complication of the Windows Recovery partition. Standard Windows disk partitioning puts the recovery partition at the end of the disk. When you increase the size of a Virtual disk through Fusion, the additional space now sits at the end of the disk and the Recovery partition sits between your existing C drive and the free space
The problem with this is that Windows Disk Management needs the free space to be adjacent to the disk partition to be expanded. The Recovery partition blocks the expansion because it sits between the C drive and the free space.
You can delete the Recovery partition in Disk Management to allow Windows to expand the C drive. Just make sure you have a Windows installation ISO handy in case you need to repair your VM.
Or you can leave about a GB or so of free space after you expand your C drive and search for instructions on the web on how to reinstall the recovery partition.