I see there were the same problem in 2013 : vSphere Client: USB device stuck at "Connecting..."
I tried to close vCenter and to restart the usbarbitrator service. Windows 7 sees the USB key, doesn't recognize it as a disk, tries to find a driver and fails.
I converted the Windows 7 to another ESXi, on a portable PC used for tests, and it's the same same behaviour. It's something linked to THIS Windows 7 (another W7 VM has no problem).