I use VMware Fusion often—I have virtual machines that span Mac OS X 10.6 to macOS 10.12.4 beta. I use the more-recent of these for supporting our customers on older versions of the OS, and keep the really old versions just for nostalgia purposes. (I have a bunch of non-macOS virtual machines, too, but they’re not relevant to this tidbit.)
In all the time I’ve been using Fusion on my retina Macs, though, I’ve never enabled this setting…
…well, I enabled it once, but turned it off, because the end result was too small to see: In Retina mode, every pixel is an actual pixel, not a doubled pixel. On my 27″ iMac, that meant the macOS VM thought it was running at (for example) 2560×1600 instead of a retina resolution of 1280×800. VMware even warns you of this in their Knowledge Base:
Mac OS X running in a virtual machine is limited to an approximate resolution of 2560 x 1600, and treats the display as a standard DPI device. This makes the text and icons to appear small in the OS X interface.
However, today I stumbled across this solution from Patrick Bougie—and it’s brilliant in its simplicity. Patrick’s post has all the details; I’ll reproduce them here in abbreviated form, just in case his page ever vanishes.