Putting anything at root is asking for almost as much trouble as using Time Machine to backup VM's :-)
Seriously, / is not the place to store user files on OSX. It's not UNIX, and Apple often clobbers things outside the user folders - which is the only supported location to store information.
Likewise, Time Machine is extremely risky for backing up virtual machines. Because they're bundles, it's extremely easy to get pieces of the bundle backed up at different times and different states - especially while the VM is in use. When purges happen, pieces of different ages can be deleted based on size and disk space needs. Last, TM is notorious for silent corruption, particularly of very large files, bundles or images. If you were able to restore, you got lucky - would strongly suggest adopting a different backup strategy.