Don’t try to drag/drop a “install macOS xxxx.app” on the Create a Virtual machine dialog or try to install from a recovery partition. The methods that Fusion is using to install with these methods are broken.

Instead, create an ISO from a downloaded “Install macOS xxxx.app”. See https://communities.vmware.com/t5/VMware-Fusion-Discussions/Fusion-12-Big-Sur-Unable-to-create-insta...

Then once you have a macOS installation ISO, create a custom VM and use the ISO in your virtual CD drive. 

Note this only works on Intel Macs since no version of macOS is able to be virtualized on Fusion 13 on Apple Silicon Macs.