The hdiutil command will mount the ISO - that's to be expected.
Are there any files in the VMWi\IsoImages subfolder found in the Virtual Machines folder in your user's home folder? If so, remove them.
Let's take this one step at a time
Open a Terminal window
Then run
cd ~/Virtual\ Machines.localized/VMWIsoImages
/Applications/VMware\ Fusion.app/Contents/Library/vmw_esd2iso getesdurl --edition Professional --lang en-us
That should return something like this:
% /Applications/VMware\ Fusion.app/Contents/Library/vmw_esd2iso getesdurl --edition Professional --lang en-us
ESDURL : http://dl.delivery.mp.microsoft.com/filestreamingservice/files/a0a4e466-0094-4903-9d46-6421eb4b1e83/26100.2033.241004-2336.ge_release_svc_refresh_CLIENTCONSUMER_RET_A64FRE_en-us.esd
SHA1 : 6e37f71fecf4a74e5c37cd49316c874f061a2fb6
SUCCESS
If that's OK, then run
/Applications/VMware\ Fusion.app/Contents/Library/vmw_esd2iso getesd --edition Professional --lang en-us
If that succeeds, you should have a file with the .esd extension in the working directory.
If it's there, then mount the VMware tools ISO using
hdiutil attach/Applications/VMware\ Fusion.app/Contents/Library/isoimages/arm64/windows.iso
The VMware Tools disk should now be on your desktop.
Now create the ISO using the following command:
/Applications/VMware\ Fusion.app/Contents/Library/vmw_esd2iso generateiso --esd *.esd --drivers "/Volumes/VMware\ Tools/vmxnet3"
The ISO should build. At the end you'll find it in your current working directory (which should be ~/Virtual\ Machines.localized/VMWIsoImages).
You can dismount the VMware Tools ISO and delete the ESD file after the ISO is built
hdiutil detach /Volumes/VMware\ Tools
rm *.esd
Post the output of these commands if something still is not working.