This has been an issue with the simulators for a long time that I have noticed.
Back in the day, there was a floppy drive in the FAS controllers, then they moved to CF cards.
The simulator still looks for this device for boot.
To get it to work, I created a dummy floppy file and named it "dummy_floppy_drive.flp".
Before starting the simulator, I added a floppy drive and pointed it to the dummy floppy file.
Started up the simulator and it boots.
I have been using this method for a while now and works fine.
I didn't upgrade the vmtools when it first booted though.
Hope this helps.
forgot to add: i'm also running 10.12.5 on my mac pro and fusion 8.5.7.