This has been discussed in this Fusion forum post: https://community.broadcom.com/vmware-cloud-foundation/question/cant-connect-windows-11-arm-vm-using-remote-desktop-on-host-machine-macos-m1
It appears that the issue started with a recent Windows update. Going to the Windows Device Manager, deleting the Microsoft Remote Display Adapter device, and restarting the VM seems to have worked around this issue.