This issue is resolved in vCenter Server 6.0 Update 3, available at
VMware Downloads.
To work around this issue if you do not want to upgrade:
- Add Assign virtual machine to resource pool privilege on the parent resource pool (Resource Pool > Cluster > Datacenter > Root). (More information on the permissions for the role can be found at the following KB: https://kb.vmware.com/s/article/1027743)
- Change the propagate to TRUE.
Note: When a folder level permission is set, it exposes the whole inventory in Host and Cluster view. While the information on inventory is visible, the user is still restricted to perform tasks for which permission are not defined.