Comment 27 for bug 971018

This is still happening on 16.10 as expected due to the previous setting of 'Opinion' the only way to work around this issue on VMWare Workstation is to change the setting under Edit->Preferences->Input Optimize mouse for games: Always. Disabling "Automatically grab and ungrab the mouse cursor." does not fix the issue.

There probably should be an option for auto-hide to unhide on being near the edge, it could be settable just in unity-tweak-tool...