This is the reply I got from our MKS team:

--
I'll bet the guest driver is switching to a software cursor at that point, 
which trips up our "Gaming Mouse" heuristic.  They should be able to change the 
UI setting for Gaming Mouse from "Automatic" to "Never" to fix that.

Assuming that's the issue, there's not a whole lot we can do about it
from our side in the vmx, without disabling the heuristic by default
which will break other apps.

It's possible the Linux driver could look into why it's switching to a software 
cursor and possibly fix that if it's in our driver and not earlier in the guest 
stack.
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I filed an internal bug.

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https://bugs.launchpad.net/bugs/1885025

Title:
  Seamless mouse breaks when changing display scaling

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