3 Node VxRail cluster, it means VSAN cluster having 3 nodes.
By default, VSAN storage policy is RAID1, FTT=1 (failures to tolerate)
It means for a VM to be compliant, VM should have two mirror copies COPY1, COPY2, WITNESS
VSAN will decide the placement of these copies:
if there are only 3 nodes:
COPY1 on Host1
COPY2 on Host2
WITNESS on Host3
if one host failed, it still has more than 50% votes, so already powered on VM will keep running., VM storage policy compliance will be shown as non-compliant.
In 3 node cluster, if a host failed, VSAN will not have self-healing capability, meaning it cannot re-build the missing component on another host.
But when a host failed, and a customer wanted to create a new VM when there are only two hosts functioning, it will not be successful. because there is a host failed when you want to create a new VM, VSAN wanted to spread the copy1, copy2, witness to 3 hosts, when it searches for the 3rd host, it will not find, so VM cannot be created.
Hope this helps.