On the face of it, it looks like the config should be picked up. A couple of things to check:
1. Make sure that you've not accidentally created "locked.properties.txt", I've seen this more times than you'd think!
2. Check the debug log file during service startup for information (c:\programdata\vmware\vdm\logs), you should see something along the lines of "Server mode: HTTP_FORWARD" along with the other configuration lines
Mike