Cursor disappears when hovering over a surface

[c-b5r]

System information
archlinux vm
sway 1:1.2-5
open-vm-tools 6:11.0.0-1

ran via VMware Workstation 15 Pro (15.0.2 build-10952284) @ Windows 10

Description
After I run sway from either a tty directly or gdm, I can see the mouse cursor.
Once and whenever I hover over anything but the empty desktop - e.g.:

• waybar
• termite
• rofi
• chromium
  the mouse cursor disappears irreversibly (can only get it back by restarting sway).
  dmesg shows the following output the moment I move the cursor over anything but the empty desktop (wallpaper):
  [drm:vmw_du_cursor_plane_atomic_check [vmwgfx]] *ERROR* surface not suitable for cursor
  Hovering from a "non-suitable surface" back over the empty desktop, dmesg does not show this error.

What's very interesting is that this issue does not exist when I run sway from gnome-shell. Here, I can hover any surface that would usually result in the above error and the mouse cursor keeps acting as it should.

Additional information

• I tried using both the default sway config and one working perfectly on my native arch machine.
• I tried the latest sway code from git

Debug log
sway -dV --config /etc/sway/config
then moved cursor over waybar
sway.log

[emersion]

Your bug report is missing debug logs. Please add a link to the full debug log file.

[c-b5r]

Sorry for that - I added the log to the first post

[RedSoxFan]

Duplicate of #3814