In the /opt/vmware/vcloud-director/logs/vcloud-container-debug.log, entries as below are logged:
com.vmware.ssdc.util.LMException: Error
at com.vmware.ssdc.util.LMException.wrap(LMException.java:131)
...
Caused by: java.lang.NullPointerException
at com.vmware.vcloud.val.internal.impl.VC20VirtualServer.moveVmIntoFolder(VC20VirtualServer.java:2331)
at com.vmware.vcloud.val.internal.impl.VC20VirtualServer.relocate(VC20VirtualServer.java:2503)
This issue can occur if there are VMs within the vApp which are no longer known to the underlying vCenter.
The affected VMs will show in an UNKNOWN state.