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Hey just chiming back in on this with an update. For me the VST still doesn't work but the AU is fine so I've just been using this. 

However I've been having this same issue with a bunch of things, one full application just will not open in Catalina despite being the version that is Catalina compatible for this exact same security reason. I got pissed off and disabled the security in terminal and its not nearly as scary as it sounds. All its doing it adding back in the "Allow" apps download from anywhere back in to the OS that they removed in a previous update. In fact it's not even adding it back in, they just removed the option to choose it!!! (see screen shot attached)

You can just hit any of the above setting and it will revert back to the standard Catalina options. Again I wouldn't "recommend" it to someone so not to be responsible, but if you're not downloading extremely dodgy apps, this is how I used to run OSX anyway. I spoke to Sam Audiofreq who suggested this to me, he's be using it like this fine and since I enabled it, literally all my problems have gone away lol!

Here's an article how to do it. Very easy and even easier to revert if you get cold feet.

http://osxdaily.com/2016/09/27/allow-apps-from-anywhere-macos-gatekeeper/

Thanks for protecting me from productively using my computer Apple x

 

Thanks for the update! Btw, I am fan :-)