In upgrading from El Capitan to Sierra, I did a fresh install on two Macs, and in reformatting the drives, I changed from "Mac OS Extended (Journaled)" to "Mac OS Extended (Case-sensitive, Journaled)".
Since the fresh install, none of my VM's work. They all refuse to start up, returning "Internal Error". I have tried Fusion 8.1.1 and Fusion 8.5 on Sierra, both with the same result. All of these VM's (a mix of OS's, including OS X, Debian, and Windows 10 Anniversary Edition) were running fine under Fusion 8.1.1 on El Capitan. There is another thread on "Internal Error", exposing some other explanations of the "Internal Error", and there are also people reporting everything is running fine under Sierra with Fusion 8.5. I also tried creating a new VM, using the 10.11.6 (El Capitan) installer app as the image. This has worked fine in the past, and it does go through the motions of making a new VM, right up to the settings page. Once you click the "run" button, however, it returns "Internal Error".
As an experiment, I just installed Sierra on an external SSD that was formatted "Mac OS Extended (Journaled)", the way I used to format everything. I installed Fusion 8.5, and copied over one of my VM's to test. It ran just fine. Which leads me to believe there might be an issue with Fusion under a case sensitive file system. Is there any knowledge base or experience with this where someone might know this for a fact? If this is indeed the case, are there any workarounds to make Fusion work under a case sensitive file system.
Thanks for any assistance.