On observing the hostd.log file on the host, you see these messages:
This issue occurs if the vCenter management agents have stopped causing the snapshot attempt to move in to the ON_SHUTTING_DOWN state.
To resolve this issue restart the VMware agents:
Ensure that the Virtual machine startup / shutdown with host feature is disabled before this step.
Restart the management agents on the host. For more information, see Restarting the Management agents on an ESX or ESXi Server (1003490).
On vCenter Server, restart the vCenter and Management Web services. For more information, see Stopping, starting, or restarting vCenter services (1003895).
Attempt the snapshot again.
The operation succeeds and the corresponding log entry for the snapshot attempt reflects a transition from ON to CREATE SNAPSHOT instead of ON_SHUTTING_DOWN.