The virtual machine is running in a monitor mode that is incompatible for Fault Tolerance.
That’s what VCenter told me, when I tried to turn on FT for a VM in our 3 node cluster. After a little research I ascertained that the issue was to do with the CPU/MMU virtualization settings for the VM. I changed this to the recommended setting (below) and restarted the VM, however trying to turn on FT still failed with the same error.
It seems that in order to force the setting to apply properly, the VM must be VMotioned to another host (it can then be VMotioned back again if necessary). Once I’d done this FT applied successfully.