Shared folders do not work in Windows 98 guests.
IIRC, USB storage was only supported starting with Windows 98 Second Edition; but even that would likely be hit or miss.
Other avenues to get files into the Windows 98 system:
Assuming VMware Tools is installed, use "drag-and-drop" from the host
Create a ISO file of the folders/files in the host and mount the ISO as a virtual CD for the Windows 98 VM
Create another virtual hard disk in another VM that you can easily transfer the files to and then attach the VMDK to the Windows 98 VM. This is akin to plugging a hard disk back and forth between two different machines. This virtual hard disk should be created with an IDE hard disk as that is likely what Windows 98 VM would best with.
To get files out of the Windows 98 system:
The virtual hard disk method works the other way around.