I think I have found the cause of this issue.
I have an ESXi server that has multiple vswitches so that I can dual home guests or provision which VLAN the guests land on.
When trying to P2V a linux server onto this host, I encounter this issue.
The P2V process from Linux includes creating a temp guest that boots with the live cloning tools to begin the conversion.
After which, the temp becomes the newly converted virtual guest.
What I've discovered is that at this stage, the temporary cloning OS ends up with the default vSwitch that may not be able to communicate back to the physical server.
You can see this by editing the guest whilst stuck at logon, and look at the network that gets allocated.
My issue now is that there is no 'Converter' option to specify the vswitch network that the cloning tool should use.
There is an option to specify the network for the new guest... once converted but this is not applied at this stage.
Essentially... there is a bug with the conversion process as it should if you an IP Helper config to select a vSwitch/Network.
So... I need to think of how to change the default vswitch.
I'm sure if this helps anyone or me right now but thought I'd share.