This is a simple fix found in KB1026437. You can make the change on an individual VM, but I think it is best to change it on the host (which applies to all VMs). I really wish the default would have this enabled.
Open a Putty session…if you don’t have putty then get it here.
1. Log into the ESXi host that you want to change.
2. Type vi /etc/vmware/config
3. Arrow down to the last line and type i which stands for “insert”.
4. Add the lines:
vmx.fullpath = “/bin/vmx”
5. Press the ESC key and then type :wq which stands for “write and quit”.
The next time each VM is power cycled it will enable the copy/paste functionality. Keep in mind that if you ever upgrade this host to a new ESXi version that this setting will go back to the default of disabled and you will have to add this line again.