In the debug enabled ESM domain log, below functions show failed to fetch information(empty details in {}), hence all the relationships are not created.
It is due to user permissions issue in vCenter.FINER: [ESMVCenterDiscovery-<Vcenter Name>] ESMDataCenter::ProcessObject hostsToClusters: {}
FINER: [ESMVCenterDiscovery-<Vcenter Name>] ESMDataCenter::ProcessObject netVDSsToDC: {}
FINER: [ESMVCenterDiscovery-<Vcenter Name>] ESMDataCenter::ProcessObject dvSwitchToName: {}
FINER: [ESMVCenterDiscovery-<Vcenter Name>] ESMDataCenter::ProcessObject hostsToCluster {}
Read permissions for the user account should be propagated to the children (sub folders/VMs) in vCenter.