Also, figured out that you can only reflink to the exact same folder. So in the case of @Nem, if he had done the above, to not get the error he got, he would need to have done:
cp --reflink /mnt/cache/VM/UbuntuBase/vdisk1.img /mnt/cache/VM/UbuntuBase/disk1.img
You can then copy the image to another folder however you cannot reflink from e.g. UbuntuBase to UbuntuNew, it has to the same folder it appears.