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This setup will not work, you can only target the VPCA CIDR over the VPC peering connection. You would need to NAT the traffic on vmA-1 to make this work the way you have it setup now. Using a TGW in place of the VPC peer will allow you to route the traffic the way you are trying to over the VPC peer as TGWs provide transitive routing and the TGW attachment subnets in the VPCA can redirect the 10.1.0.0/16 traffic to vmA-1. You could also setup the VPN to the Transit Gateway directly or from the on-prem vm1 to VGWs on both VPCs or to EC2 instances in both VPCs.
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Thanks a lot for confirming that something was wrong in my setup ! I'll give a try to the TGW and review my peering setup.