I have the exact same problem with cloning or creating new vm's. I had a support call with VMware and the end result was to begin modifying user permissions until I get it correct. That said, this problem does not happen with Administrator permission from top of vCenter down the vSphere stack.
Storage DRS view:
Trying to edit settings after VM framework initially created:
Error message:
Work around: With my current user permissions (Faculty/Staff/Student Users - Not Administrator down the stack) I can avoid this error simply by selecting "Edit the virtual machine settings before completion". However, if user forgets to check this box on the initial creation of the VM, later they will not be able to edit their work and are unhappy. Understandable!
Conclusion: I believe the problem is the creation of the VM framework wants to processes through the "Placement Recommendations" for recommending datastores for the virtual machine when using Storage DRS. I simply select "Apply recommendation" when asked.
VMware help: I need to find the elusive permission setting to avoid having to check "Edit the virtual machine settings before completion" before I get a lot of unhappy uses who try to edit their VM setting in the future and forgot to check this option.