• Creation of a Snapshot of a virtual machine fails.
• If using Snapshots to facilitate backups and clones, the other task also fails.
• If using VMware Data Recovery (VDR), manifests as the error:
  
  Failed to create snapshot for "VirtualMachineName", error -3941 ( create snapshot failed)
   
• Manual quiesce snapshot fails with the error:
  
  A snapshot operation cannot be performed
   
• In the vmware.log file of the virtual machine, you see error similar to:
  
  vmx| DISKLIB-LIB : Resuming change tracking.
vmx| FILE: File_VMFSSupportsFileSize: Requested file size (554051831808) larger than maximum supported filesystem file size (274877906944)
vmx| DiskLibCreateCustom: if your disk is on VMFS, you may consider increasing the block size.
vmx| DISKLIB-LIB : Failed to create link: The destination file system does not support large files (12)
vmx| SNAPSHOT: BranchDisk: Failed to create child disk '/vmfs/volumes/DatastoreName/VirtualMachineName/VirtualMachineName_1-000001.vmdk' : The destination file system does not support large files (12)
vmx| DISKLIB-VMFS : "/vmfs/volumes/4b82e7df-198a6606-f37c-a4badb09bd7f/VirtualMachineName/VirtualMachineName_1-flat.vmdk" : closed.
vmx| SNAPSHOT: SnapshotBranch: Unlinking '/vmfs/volumes/DatastoreName/VirtualMachineName/VirtualMachineName-000001.vmdk'.
vmx| DISKLIB-VMFS : "/vmfs/volumes/DatastoreName/VirtualMachineName/VirtualMachineName-000001-delta.vmdk" : open successful (17) size = 137438953472, hd = 0. Type 8
vmx| DISKLIB-LIB : Resuming change tracking.
vmx| DISKLIB-VMFS : "/vmfs/volumes/DatastoreName/VirtualMachineName/VirtualMachineName-000001-delta.vmdk" : closed.
vmx| SNAPSHOT: SnapshotBranch failed: The destination file system does not support large files (5).
vmx| CPT current = 2, requesting 6
vmx| Checkpoint_Unstun: vm stopped for 1287944 us
vmx| SnapshotVMX done with snapshot 'test': 0
vmx| Msg_Reset:
vmx| [msg.checkpoint.save.fail2.std3] Error encountered while saving snapshot.
vmx| The destination file system does not support large files.----------------------------------------
vmx| Vix: [7370 vmxCommands.c:2353]: VMAutomationCreateSnapshotCallback: Got CreateSnapshot callback, snapshotErr = 12, UID = 0

• Change the working directory (workingDir) of the virtual machine to a datastore with sufficient block size to support the virtual machine's disk size. For more information, see Creating snapshots in a different location than default virtual machine directory (1002929).
• Change the location of the virtual machine's configuration file. To move the virtual machine's configuration file.
• Ensure disk size limitations for configured block size of the datastore have not been exceeded. For more information see Creating a snapshot for a virtual machine fails with the error: File is larger than maximum file size supported (1012384).

Note: A similar error may be seen in VMware Data Recovery or the vSphere Client if the requesting user does have the correct vCenter Server permissions to take a snapshot, though the vmware.log file will not mention any attempt to create a snapshot.
For more information, see the Managing Users, Groups, Roles and Permissions section of the Datacenter Administration Guide for your version of vSphere.