Why does starting or live migrating a VM in a RHV cluster fail despite Cluster Memory Optimization being set to "For Server Load - Enable memory page sharing to 150%"?

Issue

• When I try to start a VM I get the following error message:

Error while executing action:

<hostname>:

    Cannot run VM. There are no available running Hosts with sufficient memory in VM's Cluster .
    Cannot run VM. There is no host that satisfies current scheduling constraints. See bellow for details:
    The host <hostname> did not satisfy internal filter Memory.

• The amount of free memory in the host is lower than the amount of memory configured for that VM, but the Cluster Memory Optimization is set to For Server Load - Enable memory page sharing to 150%.