The VMs on the remote side of the L2VPN will resolve the vMAC of the DLR instance successfully but will not be able to reach the DLR IP and will be unable to reach IPs on other subnets as a result. Because the DLR vMAC is the same for all DLR instances, the packets destined for the DLR are forwarded to the DLR port on the DVS at the remote site instead of being forwarded across the L2VPN where the correct DLR instance resides.