The TSM VM backup process uses the VMware vSphere API to get the DNS information from VMware tools running on the guest operating system. If the full DNS has not been set correctly on the guest OS, Tivoli Storage Manager will be unable to process the machine correctly.
In my case, the Virtual Machine is Powered Off, and somehow the DNS Name field is empty. (Not every powered off VM has empty DNS Name in the Summary tab)
Power on the Virtual Machine, and check the DNS Name field. Ensure the Virtual Machine name in -domain.vmfull setting is consistent with it.