Content Library is enabled by default. If the credentials are supplied then the list of content libraries will be displayed in the UI drop-down as shown below.
If the content library option is not chosen when creating the cloud, the SE images will be uploaded to the host and the Controller should have the reachability to the hosts.
Post upgrade, existing clouds with image upload to host the content library will be in the disabled state. Customers can anytime choose to enable the content library and the subsequent SE creations will happen with the content library.
Note:
If a cloud is created with content library enabled then it cannot be edited to change to host upload.