Previously, transitioning from vSphere VUM Baselines to vSphere Lifecycle Manager Images was NOT supported with VMware Cloud Foundation 4.x and 5.1. This has changed in and transitioning from vSphere VUM Baselines to vSphere Lifecycle Manager Images IS now supported with VMware Cloud Foundation 5.2+ and 9.x.
VMware Cloud Foundation 4.x
VMware Cloud foundation 5.1
VMware Cloud Foundation 5.2+
VMware Cloud Foundation 9.x
Here is the process in 5.2
Transitioning from vSphere Lifecycle Manager Baselines to vSphere Lifecycle Manager Images
If a user wants a vLCM cluster, either create a new vLCM based Workload Domain and create a vLCM cluster or create a new cluster in already existing vLCM based Workload Domain from SDDC Manager.
If it is a standard vCenter environment, it is entirely safe to proceed with this transition. This warning is a generic safety feature intended solely for environments managed by VCF's SDDC Manager.