This is possible if the VMs are Thin-Provisioned. In this case the amount of space used by their virtual hard-disk will only occupy the amount of space in the datastore needed to hold the actual amount of data in the virtual hard-disk. The virtual hard-disk can grow to a maximum of the size specified, in your case 1.75TB.
If you look at the summary page for a VM in the vSphere web client, towards the top-right of the right hand pane you'll see a section called "Capacity and Usage" if you're on vSphere 7.
This will show how much actual data is in the VMs virtual drive, as "Storage *** GB Used" and to the right of this "**** GB allocated". So in your case I would expect to see something like "1750 GB allocated", but the "GB Used" figure to be much lower.
In vSphere 6, there isn't quite as much information in this space. You get the "STORAGE USAGE *** GB" figure, but the allocation is not shown here. You can look to the "VM Hardware" pane to confirm this. If you have one virtual hard-disk the allocation will be directly visible against "> Hard disk 1". If the VM has multiple virtual hard-disks there will be a "Total hard disks" entry with a blue link displaying the number of disks, e.g. "13 hard disks" (This example from VCSA v6 appliance). Clicking this will open a sub-pane showing the total allocation of all disks. So in my example for VCSA v6 I see "> Hard disks 13 total | 319.7 GB"
If you are into PowerCLI :
Get-VM -Name '{VM Name}' | FT Name, UsedSpaceGB, ProvisionedSpaceGB
For my VCSA v7 I get :
Name UsedSpaceGB ProvisionedSpaceGB
---- ----------- ------------------
SI-VCSA7 57.1281472742557525634765625 719.94944473821669816970825195
You can see from this that our VCSA v7 is barely touching it's provisioned storage. This is unusual for us, as we have a policy of only using thick provisioning, so we only see this on appliances that have been provided to us, like VCSA.
