This issue occurs if the vSAN enabled cluster does not have required number of hosts contributing storage that can satisfy the storage policy assigned to the virtual machine. For example if the storage policy of the VM states failures to tolerate value of 1, then at least 3 ESXi hosts with working diskgroups are needed to successfully create the VM.
RAID 0/FTT 0 - Minimum of 1 ESXi host
RAID 1/FTT1 - Minimum of 3 ESXi hosts
RAID 1/FTT2 - Minimum of 5 ESXi hosts
RAID 1/FTT3 - Minimum of 7 ESXi hosts
RAID 5/FTT1 - Minimum of 4 ESXi hosts
RAID 6/FTT2 - Minimum of 6 ESXi hosts