I'm having this same problem on Parallels version 12.2.1 (41615). I share /Users from my Mac host to my Fedora 25 guest.
Code:
dsimon@freddy ~> mount | grep Users
/media/psf/Users on /media/psf/Users type prl_fs (rw,nosuid,nodev,noatime,sync,context=system_u:object_r:removable_t:s0)
dsimon@freddy ~> ls -l /Users
lrwxrwxrwx. 1 root root 17 Jul 2 17:51 /Users -> /media/psf/Users//
dsimon@freddy ~> df -h /Users
Filesystem Size Used Avail Use% Mounted on
/media/psf/Users 465G 310G 156G 67% /media/psf/Users
dsimon@freddy ~> df -h /media/psf/Users
Filesystem Size Used Avail Use% Mounted on
/media/psf/Users 465G 310G 156G 67% /media/psf/Users
dsimon@freddy ~> cd /Users/dsimon/graal
dsimon@freddy /m/p/U/d/graal> ls -l graal-jvmci-8/.git/objects/00/7c8e6fb3779b7d32a1da5d83341abb00085c99
-r--r--r--. 1 dsimon dsimon 45 Oct 4 23:37 graal-jvmci-8/.git/objects/00/7c8e6fb3779b7d32a1da5d83341abb00085c99
dsimon@freddy /m/p/U/d/graal> cp graal-jvmci-8/.git/objects/00/7c8e6fb3779b7d32a1da5d83341abb00085c99 my-copy
cp: cannot create regular file 'my-copy': Cannot allocate memory
dsimon@freddy /m/p/U/d/graal> ls -l my-copy
-r--r--r--. 1 dsimon dsimon 0 Oct 31 11:04 my-copy
As shown by the df output, there's clearly enough free space in /Users/dsimon/graal to copy a 45 byte file.