From a docs comment at https://access.redhat.com/documentation/en/red-hat-virtualization/4.0/paged/self-hosted-engine-guide/chapter-2-deploying-self-hosted-engine#comment-1093251

"I would add that if you use a different /tmp directory to ensure vdsm:kvm can use it. If you create one with root by default, they will not be able to and you will not get a warning, the installed will fail with a "can't sudo" error. To use the RHV-M Virtual Appliance for the Manager installation, ensure one directory is at least 60 GB. The hosted-engine script first checks if /var/tmp has enough space to extract the appliance files. If not, you can specificy a different directory. [Ensure this directory is accessible by the vdsm user and kvm group.]" 

This should be updated in the SHE deployment procedures for both RHEL hosts and RHVH, and anywhere else in the SHE Guide (or elsewhere) that it is applicable.