Resolution
To work around this issue, remove the primary hard drive and add a new virtual drive:
Launch VMware Fusion.
On the Mac menu bar click on File > New.
In the new virtual machine creation wizard, click Continue without disc.
Select Use operating system installation disc or image and from the dropdown select Choose a disc or disc image.
Navigate to the .dmg file, ISO image or the .app file and click Open.
Click Continue.
Select the version of Mac OS X installed and click Continue.
Click Customize Settings.
Click Save in the window that appears.
Click Hard Disk (SCSI) > Advanced options and click Remove Hard Disk. Select Move to Trash as this file is empty.
Click Add Device > New Hard Disk > Add.
Resize the new hard disk, then click Apply and close the settings window.
Start the virtual machine, which is now available in the Virtual Machine Library.
Format the new hard disk to make it ready for the installing Mac OS X guest operating system:
Start the Mac OS X installation.
From the OS X Utilities window, select Disk Utility.
Select the hard disk that is available and click Erase > Erase. This creates an Untitled volume. You can rename the disk if required.
Quit Disk Utility and click Continue.
Follow the installation wizard to continue with the installation.