This issue is resolved in the below vCenter Server versions:
- vCenter Server 6.5 Update 3 and later
- vCenter Server 6.7 Update 1b and later
Workaround:
To workaround this issue. virtual machines must be removed from inventory individually when using the vSphere HTML5 Client.
Alternatively, use the vSphere Web Client (Flex) for unregistering all virtual machines in a VM folder.