A cluster becomes overcommitted (yellow) when the tree of resource pools and virtual machines is internally consistent but the cluster does not have the capacity to support all resources reserved by the child resource pools.
There will always be enough resources to support all running virtual machines because, when a host becomes unavailable, all its virtual machines become unavailable. A cluster typically turns yellow when cluster capacity is suddenly reduced, for example, when a host in the cluster becomes unavailable. VMware recommends that you leave adequate additional cluster resources to avoid your cluster turning yellow.
In this example:
A cluster with total resources of 12GHz coming from three hosts of 4GHz each.
Three resource pools reserving a total of 12GHz.
The total reservation used by the three resource pools combined is 12GHz (4+5+3 GHz). That shows up as the Reserved Capacity in the cluster.
One of the 4GHz hosts becomes unavailable, so total resources reduce to 8GHz.
At the same time, VM4 (1GHz) and VM3 (3GHz), which were running on the host that failed, are no longer running.
The cluster is now running virtual machines that require a total of 6GHz. The cluster still has 8GHz available, which is sufficient to meet virtual machine requirements.
The resource pool reservations of 12GHz can no longer be met, so the cluster is marked as yellow.