Ok I have figured it out.
Two things I missed or mis-configured.
First, both appliances run docker behind the scenes. So I needed to enable virtualization for the particular VM in vSphere.
Second, when I created the iso file. I renamed .rpm to something else like tet-sensor.X.X.X.rpm to tet-netflow.rpm. When scripts are executed under /usr/local/tet/sensor_containers_setup.sh I had to rename the tet-sensor.?.?.?*.rpm to tet-*.rpm.
I reboot the VM while the ISO still connected and it worked.