I asked that question too. The people at the OU give an answer along these lines.
The target audience is new PhD (doctoral) students. In addition to the specific research problem they are starting to tackle with their supervisor, there is a whole lot of other stuff they need, like research skills (how to find a paper, how to write a paper, ...). At least, in this day an age the university needs to be seen to be probividing that sort of skills training to PhD students.
There are also social uses. It can be a place for PhD students to discover who the other PhD students are and communicate with them for mutual support (in addition to face-to-face events).
Now, if is clear that a lot of the standard VLE tools are just what you need for this VRE. On the other hand, compared to a typical university VLE, that is integrated with the Student information system, so students are automatically enroled on just the courses they are supposed to be on, etc. THe VRE is probalby a configured in a more relaxed way. For example, once a user has an account on the system they can probably self-enrol on any of the research skills courses whenever they want/need to, and will then study them at their own pace.
So, really, it can be Moodle, but with different configuration, so it is almost certainly best to make this a separate Moodle install. And you need to communicate the need for that clearly to university managers. Hence it helps to give it a name (VRE, rather than VLE) instead of confusing everyone with two different systems called Moodle.
That is mostly what I have deduced from a few conversations. If anyone knows better, please correct me.