Although Fit Guest Now was enabled after open-vm-tools was installed in Arch Linux, however clicking on Fit Guest Now did not have effect.
I tried these steps and worked for me.
- Enable Accelerate 3D graphics in VM’s display settings
- Install xf86-video-vmware driver
sudo pacman -S xf86-video-vmware
Ensure vmtoolsd starts, if not do this
sudo systemctl enable --now vmtoolsd, you will immediately see the effect.