This issue occurs due to the the space demand calculation in the VMware Storage DRS algorithm for initial placement does not correctly account for the PercentIdleMBInSpaceDemand parameter in VMware vSphere
This is expected behavior for initial placement case. Because, for initial placement, SDRS uses the "used space" of the datastore for generating the recommendation rather than "entitled space". However, SDRS uses the "entitled space" ONLY during load balance.
Example :
Datastore-1 : 50GB Capacity
VM1 - 50GB Thick VM
Used Space - 50GB
Entitled Space - 50GB
Datastore-2 : 50GB Capacity
VM2 - 30GB Thick VM
VM3 - 15GB Thin VM
Used Space - 30GB
Entitled Space - 45GB (Because PercentIdleMBInSpaceDemand is set to 100)
When we create a new VM or add a new disk of size 10GB. SDRS considers the datastore "used space" for initial placement cases. Hence, it will see that only 30GB is used on the Datastore-2. So, it can fit in the new 10GB disk/VM. So, it generates the recommendation.
If we consider entitlement to determine initial placement, some provisioning failures may be undesirable to customers. Specially in a heavily thin provisioning environment when datastore usages are reaching threshold. The headroom part in entitlement can be too conservative.
SDRS considers the space usage of powered-off VMs as well. Considering space growth for powered-off VMs does not make as much sense as for powered-on VMs.
This is a known issue and engineering team is aware of this.