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Update
...
However, at this stage Vcenter will not say the tools are OK
anymore, but instead are Unmanaged
.
This might sounds like a bummer, but it appears to be a cosmetic issue and in fact the tools are OK.
Here is what my VM looks like in Vcenter:. You can see that the VM is using Thin Provisioning, so that despite the VM having an 18 GB disk, it uses less than 3 GB because it is still pristine.