Starting with vSphere 6.5, vSphere vMotion always uses encryption when migrating encrypted virtual machines. For virtual machines that are not encrypted, you can select one of the encrypted vSphere vMotion options.
Encrypted vSphere vMotion secures confidentiality, integrity, and authenticity of data that is transferred with vSphere vMotion.
For unencrypted virtual machines, all variants of encrypted vSphere vMotion are supported. Shared storage is required for migration across vCenter Server instances.
For encrypted virtual machines, migration across vCenter Server instances is not supported.
What is Encrypted
For encrypted disks, the data is transmitted encrypted. For disks that are not encrypted, Storage vMotion encryption is not supported.
For virtual machines that are encrypted, migration with vSphere vMotion always uses encrypted vSphere vMotion. You cannot turn off encrypted vSphere vMotion for encrypted virtual machines.
Encrypted vSphere vMotion States
For virtual machines that are not encrypted, you can set encrypted vSphere vMotion to one of the following states. The default is Opportunistic.
Do not use encrypted vSphere vMotion.
Use encrypted vSphere vMotion if source and destination hosts support it. Only ESXi versions 6.5 and later use encrypted vSphere vMotion.
Allow only encrypted vSphere vMotion. If the source or destination host does not support encrypted vSphere vMotion, migration with vSphere vMotion is not allowed.
When you encrypt a virtual machine, the virtual machine keeps a record of the current encrypted vSphere vMotion setting. If you later disable encryption for the virtual machine, the encrypted vMotion setting remains at Required until you change the setting explicitly. You can change the settings using Edit Settings.
See the vCenter Server and Host Management documentation for information on enabling and disabling encrypted vSphere vMotion for virtual machines that are not encrypted.