Update:

typing VBoxClient --clipboard seemed to fix it, although it's not clear how because it didn't kill the old processes. But, that's a huge help, because at least I can copy/paste within the VM. Previous workaround was using the center-click in X in the VM, which does not seem to get copied to Sculpt (although center-click in Sculpt seems to paste the regular clipboard - probably Sculpt only has one clipboard unlike X).

The problem recurred, even without reboot. It may be related to Atom text editor or LXDE, since I use both. It's now the limited clipboard is only an issue within the VM. Copying a moderate text (now the limit of large is onto the 103rd line which is ~412 codepoints) truncates within the VM, but in the Sculpt log the full copy occurs, and the full content can be pasted to Sculpt apps but not in the VM! Killing the VBoxClient did not resolve things. Very strange.