After having done run this failing command, users could no longer open ZDC. After a maddening, inconsistent, and hours long effort at trying to restore access which I will record under
Unable to launch Zimbra Desktop we were able to get users running again.
To just get the zimlets we absolutely needed, we installed them on a per user basis via the ZDC preferences and, to our surprise, they worked. So I am guessing that deployed zimlets are not stored under zimlets-deployed in the installation directory as we did not see them there and did not want to see them there lest regular users have access to areas we don't want them to access on a multi-user system.