Ok I got ya. You are doing a fresh install and not an upgrade.
So, it looks like the information becomes stale and however the powercli commandlet is doing it isn't working properly. I'm with Luc in that it is probably a bug that the dev team will have to look at. That being said if there is any possibility to remove the host from the VDS first by migrating the uplinks/management to standard and then performing the upgrade that would help.
I have a script here to move management/vmotion over to standard switch you could kick off before upgrading and then run the remove host command. Then proceed with your upgrade.
Swing an interface over
$VMhost| Get-VMHostNetworkAdapter -Physical -Name vmnic1 | Remove-VDSwitchPhysicalNetworkAdapter -Confirm:$false
Get-VirtualSwitch -VMhost $VMHost -name "Vswitch0" | Set-VirtualSwitch -Nic "vmnic1" -Confirm:$false
Migrate the vmkernel interfaces
Migrate rest of uplinks that you have:
$VMhostObj | Get-VMHostNetworkAdapter -Physical -Name vmnic0 | Remove-VDSwitchPhysicalNetworkAdapter -Confirm:$false
Get-VirtualSwitch -VMHost $VMHost -name "Vswitch0" | Set-VirtualSwitch -Nic "vmnic0","vmnic1" -Confirm:$false
Get-VDSwitch | Where {$_.Name -eq $VDSwitch} | Remove-VDSwitchVMHost -VMhost $VMHost -Confirm:$false