Ok, please, try to uncheck this option and then, after plugging the iPod in, connect it manually (as you already did with the option enabled).
You can also try to back up your VM and download a 5160 build trial because it should work with devices better.
Such issue can happen because MacOS detects some devices automatically and "takes" them to its side so that Guest OS can't take it to its side. And probably such is indeed the case.
Best regards,
Alicia.