Old thread I know, but I just ran into this during and upgrade from 4.0 to 5.1 I selected 'moved' using the following logic:
The physical server was the same but the upgrade from 4.0 to 5.1 logically created a new server - this was an upgrade (actually a forced migration,) with datastore preserved. The datastore is logically the same, but the OS is new, and so would the OS identity. Settings are maintained but migrated from the 'old' (old LOGICAL, same PHYSICAL) server at 4.0 to the 'new' (new LOGICAL but same PHYSICAL) server at 5.1.
The VM's boot up and check the Hypervisor ID (presuming UUID) and notice that the hypervisor LOGICAL ID is different from the last time they booted, so, they dilligently ask "Was I Moved or Copied".
Selecting 'Moved' was my logical choice because the VM's are booting on a new 'logical' server.
Selecting 'Copied' is more intrusive because it generates a new UUID on the VM, and this can cause issues in that other OS elements may get 'scrambled'. Copied implies that this is a duplicate of some other VM somewhere else and a new unique identity should be created for the replicant copy.
I was nervous but followed the above to an unintrusive and successful upgrade/migration.
The technical terms in this post may not be 100% but I think the logical though process is accurate. Perhaps someone could fill in the missing details. Long story short:
select moved when asked during upgrade if the VM has not changed and has not been copied.
select copied when you are duplicating vms.
giz