I set tile over vinyl sheet all the time and it is fine. If it is vinyl squares i do remove because they move too much. If the sheet vinyl is sound this is a fine practice. If it is peeling up it needs to be removed though. The sheet vinyl actually provides a slip sheet under the tile and this is good. Whether its on wood or concrete this is ok. BUT, make sure that modified thinset is used, this product adheres better and is better overall. Versabond bt Customs is a good modified thinset, or you can add the modifier to regular thinset also.
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