Symptoms:
This issue is resolved in VMware vCenter Server 7.0 Update 1, available at ProductFiles - Support Portal - Broadcom support portal
Workaround:
To work around this issue if you do not want to upgrade, only attempt HSM interactions (defining a vLCM cluster's Desired Image, scanning for compliance, or remediating a cluster) when logged in as a user whose name is strictly Latin-1 compliant.