The provided VMEmulator is not happy with the indentation of FunctionCalls/NestedCall/Sys.vm:
% VMEmulator FunctionCalls/NestedCall/NestedCallVME.tst
Sys.vm: in line 15: Unknown label - Sys.init$LOOP
Removing the initial tab on line 15 (that is, un-indenting "label LOOP") fixes it.
This can be viewed as either a defect of the .vm file (being indented in a way that displeases the VMEmulator), or of the VMEmulator (not ignoring whitespace everywhere as it probably should). I chose to report it as a problem in the .vm file as I think that's going to be the easiest to fix.
Note: this had been reported in the Coursera forums too:
https://www.coursera.org/learn/nand2tetris2/discussions/forums/I5aw0Cj3Eea8jw6UvTi2Tw/threads/HhoVkJVCEe6qhxJalRD6kw (probably need to be logged in and registered in this course for the link to work though).
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