Definitely, the VM seems powered on, you need to perform this with the VM powered off. The correct syntax should be:
vmkfstools -i DOL-40-ACD-A.vmdk -d thin DOL-40-ACD-A-thin.vmdk
Another question: why do you think the disk is not thin? If you are 100% sure you selected this, the disk should be thin. Can you post a screenshot of the Browser Datastore for this folder?