Started having this strange behavior a few days ago.
If I start an encrypted VM, it takes my password fine and starts normally. However, if I close the tab in Workstation and tell it to "continue running in background" and try to resume it later, the password prompt does not accept the correct password. Pressing enter or clicking "continue" has no response. If I put in an incorrect password, it proceeds with the correct error message. I started having this problem in Workstation 10, but have tried upgrading to 11 but still have the same problem. I tested it on some other VMs I run, and they all have the same problem. I also tried uninstalling Workstation, deleting all remaining files, and deleting all the VMWare folders from AppData before reinstalling. Host OS is Windows 8.1.
Any suggestions? I googled around quite a bit without being able to find anyone else having this problem. The only way I can get back into the OS is to kill the VMX process in Task Manager and then reboot the VM.