When attempting to storage vMotion to new datastore, while changing VMDK to thick provision, fails with error:
The disk convert allocation type operation failed: 38 (Function not implemented).
ESXi 8.0 or later
This issue occurs in ESXi 8.0 or higher when the source datastore uses the VMFS5 file system. Version 8.0 introduced a 'Convert Allocation' feature that allows disk provisioning changes (Thin to Thick) to happen simultaneously during a Storage vMotion.
Limitation: This specific feature is currently not supported on VMFS5 volumes. If a migration requires an inflation operation (changing a Thin VMDK to Thick) from a VMFS5 source, the process fails. However, migrations that do not change the provisioning type, or those that convert from Thick to Thin, remain fully supported.
To resolve this issue, perform the migration and disk inflation as two separate operations:
1: Migrate the VM:
2: Power Off the VM:
3: Inflate the Disk via Datastore Browser:
Note: This is a known issue affecting ESXi 8.0u3 when the source is VMFS5. The fix is planned to be resolved in ESXi 8.0P09 (8.0 u3j).