Install MacOS 10.12.2 on VMWare Fusion 8.5.3
The description here: https://kb.vmware.com/selfservice/microsites/search.do?language=en_US&amp;cmd=displayKC&amp;externalId=2056603 is still valid - which also has a small video of the installation process.


Select File > New from the Fusion menu bar.
Select "Install from disc or image" and Click Continue.
Drag and drop the Install MacOS Sierra application into Use operating system installation disc or image dialog box.
Click Continue.
Fusion should automatically discover the Guest Operating System. If not, ensure that the Operating System is set to Apple Mac OS X and that the version is set to Mac OS X 10.12.x. Click Continue.
If you want to modify any of the settings, such as memory (RAM), CPU, or hard disk size, click Customize Settings and specify the non-default values.
Click Finish. The installation starts.
When prompted, select Reinstall Mac OS X and click Continue.
Click Continue.
Agree to the license agreement and follow the prompts to begin the
 installation.