VDL2 instance initialization failed.
This failure occurs when not enough resources are present, or the number of VXLAN ports exceeds the limit during the VXLAN configuration of the overlay instance.
See the event description for more detailed information specific to this event. No specific resolution is possible, assuming all other configuration is correct and system resources are available, it is advised to contact VMware Support.
More details can be found in the VMware KB article VXLAN instance initialization fails.
Refer to the VMware Online Documentation for more information on vCenter event messages and possible solutions.