Under certain circumstances, the ESXi host's encryption mode can become disabled.
An ESXi host requires that host encryption mode is enabled if it contains any encrypted virtual machines. If the host detects it is missing its host key, or if the key provider is unavailable, the host might fail to enable the encryption mode. vCenter Server generates an alarm when the host encryption mode cannot be enabled.
Procedure
What to do next
If, after restoring connection to the key provider, or manually recovering keys to the key provider, the host's encryption mode remains disabled, re-enable the host encryption mode. See Re-Enable ESXi Host Encryption Mode.