UseHWTSO setting is only applicable on non-overlay packets. If the packet is encapsulated, it is recommended to disable VXLAN/Geneve inner TSO to avoid PSOD.
Workaround:
(1) Disable Hardware TSO
# esxcfg-advcfg -s 0 /Net/UseHwTSO
Disable UseHwTSO6 if IPv6 is configured.
# esxcfg-advcfg -s 0 /Net/UseHwTSO6
(2) Disable VXLAN/Geneve inner TSO
Option (a)
It's not persist across reboot, but it can disable TSO on a specific vmnicX.
# esxcli network nic software set --ipv4tso=true --ipv6tso=true --geneveoffload=true --ipv6tsoext=true --vxlanencap=true -n vmnicX
Option (b)
It's persist setting across reboot, apply to all the qfle3 vmnics on the host.
# esxcli system module parameters set -p "offload_flags=1" -m qfle3
# reboot