The bios geometry just shouldn't matter. Sure, it is odd that it uses a different geometry for an image file than a disk, but whether the nonsensical geometry specifies 63 or 32 or 3 sectors per track, partitions are supposed to have a 1mb alignment these days. This is what you get if you specify the start position as 0%, so it doesn't make sense for the free space check to advertise a lower position as a valid start, especially when you get a warning exception when you try to use it, which I guess is ignored by vmbuilder.
The bios geometry just shouldn't matter. Sure, it is odd that it uses a different geometry for an image file than a disk, but whether the nonsensical geometry specifies 63 or 32 or 3 sectors per track, partitions are supposed to have a 1mb alignment these days. This is what you get if you specify the start position as 0%, so it doesn't make sense for the free space check to advertise a lower position as a valid start, especially when you get a warning exception when you try to use it, which I guess is ignored by vmbuilder.