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That's what I referring as being "wierd" even though its not necessarily "wierd". Just wierd to the process. There is no reason for a process to cp or mv a file from a cifs share to "add" the SGID "bit". Turns out I can disable this in my storage. I set "Disable setuid/setgid file creation" on the share and it started working correctly. The CIFS mount was a submount of a NFS share.
Now what would Oracle VM change about my process.....that would cause a simple "cp" or "mv" command to add the setgid "bit" to the target file?