I have encountered this message a few times after disabling Fault Tolerance to run a few maintenance tasks and trying to re-enable it (without shutting down the VM).
In short, you need to edit the settings of the VM
– Right click -> Edit settings
– in the Options tab -> in Advanced->CPU/MMU Virtualization
– Change from Automatic to the appropriate value (Use Intel VT-x and Software MMU in my case)
– vMotion the VM to another host to validate the setting change
– Enable FT and voila, it works!