Option to select macOS 12 Monterey is not available in vSphere during the process of creating or editing a virtual machine. This affects VMs with a virtual hardware version below 18.
For virtual machines with hardware version less than 18, choose the most recent version of macOS provided by your product, e.g. "Apple macOS 10.15 (64-bit)" for VM with hardware version 17.
Note: The VMware Compatibility Guide (Category=guestos ) is the authority on supported configurations of third-party hardware and software, including Guest Operating Systems, certified with vSphere/ESXi releases. In the VMware Compatibility Guide, you will find that support for macOS 12 was introduced with vSphere/ESXi 6.7 Update 3.
The best practice for configuration of a virtual machine is to use the Guest OS selection that best matches the operating system running in the virtual machine. However, an exact match may not be available for a specific operating system. Typically this is a result of cases where a new operating system was released after a particular vSphere release already became generally available. In such cases, the result of successful certification testing for new operating system releases is published in the VMware Compatibility Guide along links to KB articles with any special guidance, including the use of an alternate guest operating selections where an exact match is not available.