I have the same issue. I believe this may be because the VMWare shared folder filesystem does not support all filesystem operations properly. For instance, you cannot create a hardlink:
$ touch foo
$ ln foo bar
ln: bar: Operation not supported
… and you cannot copy a symlink:
$ touch foo
$ ln -s foo bar
$ cp -R bar baz
cp: bar: could not copy extended attributes to baz: Invalid argument
Furthermore, once the git clone fails, the filename of the checkout can never be used again:
$ git clone https://github.com/twbs/bootstrap.git
Cloning into 'bootstrap'...
[...]
fatal: index-pack failed
$ touch bootstrap
touch: bootstrap: Input/output error
Others have noticed the issues with hardlinks and git clone in VMWare shared folders. Nobody has found a solution.
I have worked around this issue when using an OS X guest by saving a disk image to the shared folder, mounting the disk image in the guest, and then git-cloning into the mounted filesystem. A similar technique may work in Linux, but I haven’t tried it.