One interim step before a reinstall of Sonoma is to create a new user account, and then run Fusion from there.
The step after that is an overlay install (reinstall Sonoma over the existing installation).
Last idea - the VM must be on an APFS or HFS+ formatted drive, so if it's on an external drive with exFAT, or especially if there's an NTFS driver involved, it won't work.
