I have found lots of conflicting information online, some saying VMFS5 will support this, and some saying it does not.
I'm going out on a limb and say it doesn't.
I did find another workaround - but it's manual. A quick bash script will make it less tedious.
using vmkfstools -K (punchzero) on the VMDK files for the largest VM's will recover space on the datastore.