What’s the host’s hardware configuration (how much memory is the biggest concern, but what type of CPU is also important, and whether the virtualization extensions are enabled in the BIOS).
You might need to add the open-vm-tools package in the guest. I run multiple VMs in Workstation Pro on a TW host without issue, including TW, Leap, and other Linux distros).
Make sure the open-vm-tools package is installed in the guest and that vmtoolsd.service is enabled and running.
Something that might be worth trying is seeing how it performs using Xorg rather than Wayland.
It shouldn’t be necessary, but you might bump the VM RAM up to 8 GB. I typically start at 8 GB, but run several of my Linux VMs at 16 GB (but I also have host RAM to spare, too)
I’m setting up a test now, as I suspected that might be the issue (or part of it), as I don’t know if the video driver / HID device support in open-vm-tools supports wayland yet.
In that case, it might be worth reporting a bug through bugzilla.opensuse.org. Same login credentials as you use here.
It may also be that KDE Neon has an updated version of open-vm-tools - lots of potential reasons why there could be differences, but it does sound like something probably worth reporting through bugzilla.
I can confirm at least that with a Linux host, the mouse has to be manually released from the VM when wayland is in use in the guest. Though when I manually released it and then clicked back in, I was then able to freely move the mouse out of the VM window.
But I can’t reproduce the performance issues, but that could be due to hardware differences or other factors.