From what I've found out so far from having a same issue is that there is some issue with persistence installations, because I was able to install Kali on HD and it is running VM fine, Used same ISO, same commands to update and install the VM.
Problem seems to be with kernels, I've ran out of persistence and gave up on USB persistence, for at least trying VM on it.
<Note: I've tried posting this issue on other forums too, no response.
