In the NSX-T Data Center deployment, you need to ensure an overlay transport zone and overlay-backed logical switches exists.

East-West service insertion is applied to an entire NSX-T deployment. You cannot deploy the service at a cluster-level or a host-level.

All transport nodes must be of the type Overlay because the service sends traffic on GENEVE or overlay-backed logical switches. A overlay-backed (GENEVE-backed) logical switch is provisioned internally and not visible on the user interface.

Even if you plan a deployment using only VLAN-backed logical switches, East-West traffic passes through overlay transport zones and overlay-backed logical switches. So, ensure that you create an overlay transport zone and GENEVE-backed logical switches. Without these requirements, during a vMotion, the guestVM on a host cannot be migrated to another transport node. The guestVM goes into Disconnected state causing configuration errors in the East-West service.