This issue has been going on for years. I finally figured out how to describe it today.
I am using a Linux host. When using Linux guests and selecting “Resize Remote Screen”, setting a custom resolution and it doesn’t matter if “Match the client resolution upon connecting” is set or cleared. The remote desktop opens at the specified resolution and the window sizes to match the desktop.
With Windows remote desktops if the same settings are made with “Match the client resolution upon connecting” checked, upon logging in the remote desktop resolution shrinks to 640X480 or possibly 1024X768. If “Match the client resolution upon connecting” is cleared, the remote desktop opens at the custom resolution but the window doesn’t resize to match the size of the desktop.
I hope someone with the power to fix this behavior will take a look into it.