Update your ESXi host client and try creating the VM via the HTML5 web client.
Since you are using Workstation, you can also create the VM on the ESXi through Workstation.
Use the "Connect to Server" to connect the ESXi (it does not matter whether it is a physical ESXi or that ESXi itself is a VM). Once connected, you should be able to create VM on the ESXi from Workstation.
Make sure that the "Virtualize Intel VT-x/EPT or AMD-V/RVI" is checked for the ESXi VM CPU settings in the Workstation.
The CPU of the host machine also need to have Secondary Level Address Translation (SLAT); which is called Extended Page Table (EPT) in Intel CPUs or Rapid Virtualization Indexing (RVI) in AMD CPUs. Without EPT or RVI, you cannot run 64-bit guest OS VMs inside an ESXi VM.
I have updated the host client to version 1.24. I am experiencing the same problem when using the remote client (via the Chrome browser). I can successfully connect to the instance of ESXi running under Workstation 12 by selecting File (from Workstation 12) > Connect to server and supplying the IP address of the host (a local 192.168.blah.blah IP address), user id (root) and password. This brings up a healthy looking Workstation user interface:
But when I click on Create a new virtual machine, Workstation 12 quits/exits/dies. The Workstation 12 UI just vanishes with no error message and the Workstation 12 process terminates (any running VMs remain and restarting Workstation 12 correctly shows those running VMs).
I have confirmed that "Virtualize Intel VT-x/EPT or AMD-V/RVI" is checked for the ESXi VM CPU settings in the Workstation. I have NOT confirmed that the CPU of the host machine has Secondary Level Address Translation (SLAT); which is called Extended Page Table (EPT) in Intel CPUs or Rapid Virtualization Indexing (RVI) in AMD CPUs. I haven't confirmed this yet because I haven't got far enough for this to be an issue. Since I can't create VMs within ESXi, I don't get as far as attempting to even install the guest OS.
So I'm still unable to create a VM within the ESXi host (running under Workstation 12).
So you're talking about two different interfaces here: One is the ESXi embedded host client accessed purely via a web browser; the second is an API connection through Workstation. Are you saying if you connect to the host client you get the same failure? Can you share screenshots showing your attempt and the failure?
If you have an Intel CPU, you can check the Intel ARK site (https://ark.intel.com) and see whether the CPU has Intel Virtualization with Extended Page Tables indicated Yes. EPT started with Nehalem CPU but there are exceptions.
I am not familiar with AMD CPU family but I suppose you can refer to this
On the other hand, I also noticed that you have a number of VMs with OS X in their names.
It is a violation of both Apple EULA and VMware EULA to run macOS VMs on VMware Workstation.
Apple EULA requires that macOS runs only on Apple Hardware.
Running macOS on VMware Workstation means that the VMware Workstation you are using is cracked. This violates clauses 3.1(e), 3.1(h) and 3.4 of the VMware EULA
Considering that the VMware Workstation you are using is cracked, it can easily because it is cracked/broken that is why it simply crashes when you click on the "Create a new virtual machine" in the ESXi VM tab.
Because I'm running ESXi 6.5 under Workstation, I just decided to create a new Workstation VM that contained a fresh install of ESXi. This turned out to be build 4887370. So now I have two sibling ESXi guest OSes under Workstation. The new one allowed me to create a Windows 10 VM with no problems. Note, I have not yet installed Windows 10, I've just created a Windows 10 VM. But this is further than I was able to get using the older instance of ESXi (build 4564106).
While it is true that I've hacked my install of Workstation 12 to accommodate Mac OS VMs, this hack does not appear to have caused the problem I was experiencing (as I have not re-installed Workstation).