Thick means that all the space is allocated when the VM is created. So if your host has 1Tb of space and you want to have 10 VMs, they can each only have 100Gb of space allocated to them. Thin means that the space is only allocated as needed, so you can set up your 10 VMs, each with a 200Gb main partition. Things will only get crashy if the total used/allocated space reaches the 1Tb limit, at which point nothing new can be written to disk.
I believe thick is better suited to production, although Sliq has no policy. As it is your VM in your environment you can run the show as you wish. There may be no easy way to go from thick to thin while keeping the machine online, it may entail a copy of the VM to a newer VM.