Whilst I think this answers the OP's original question, what I required was a new ESXi preallocated vmdk file which was 30gb smaller than the original.
What this command does is create a copy of the preallocated vmdk as a growable vmdk, of the same disk size but smaller footprint. So you would not be able to convert it back to preallocated without taking up exactly the space it did before. Also you would not be able to control the growth of the file on the system you put it on.
For instance, in my case, my 50gb SSD had failed after power failure (common error I now know) and I only had 30GB left on the other volume. So I had to do two things.
1. make the vmkd smaller
2. ensure the vmdk did not grow beyond the volume size and impact all the other VM's.
Hence why I posted an alternative.