Just wondering is this a Known issue ?
Yes, I asked our developers and it is expected behavior.
"Operational State" is the state of the guest operating system installed on the VM, and the only way we can know this state is if VMware Tools is installed on the guest OS.
The actual VMware API property we read for this is guestState. For more information, see http://pubs.vmware.com/vsphere-50/topic/com.vmware.wssdk.apiref.doc_50/vim.vm.GuestInfo.html.
Also, "Guest Status" is the Solarwinds status of the VM node (up, down, and so on).
In my opinion, the terminology in the pop-up text can be interpreted in too many ways, so I've asked our dev team to have a look at revising this in the future.