Is there an error you are receiving? I believe shared storage is required but I can't find this specifically mentioned in the documentation.
By now I've tested it with a shared storage (a terrible slow one), with that everything works as expected.
In the logs I found stuff like this:
Image Publish initiated by InitialPublish for Pool <poolname> failed for Image [VM=<snapshot-path>, State=PUBLISHING]
Image Unublish initiated by InitialPublish for Pool <poolname> failed for Image [VM=<snapshot-path>, State=UNPUBLISHING]
Provisioning error occurred for Machine null: Cloning failed for Machine
I also opened a ticket at VMware, but no answer yet (just analyzing logs and details).
I'd be curious what support says but shared storage is likely a requirement.
After a lot of testing, also together with the VMware-Support, everything is working now.
Also deploying from a local storage on just one host to the whole cluster.
Nobody knows for sure why there was an error at first, but my guess is, there was an old reference in an even older snapshot that was completely local (e.g. mounted ISO) which was blocking the deployment.
So at the moment I would say, local storage should work fine, shared storage is better.