After updating to VCSA 6.7U3j and 7.0 u1, if the IP address is specified as the mail server for the alarm, sending mail will fail.
If you specify the mail server as FQDN, the mail will be sent successfully.
In sendmail log of messages, you see similar entries
DSN: Host unknown (Name server: 192.168.0.100: host not found)
Directly specifying the mail server IP is considered as relay server with backend sendmail SMTP auth changes.
Resolved in vCenter 6.7U3
If you need to use the IP address instead of an FQDN, enter the Mail Server address setting as IP within brackets: [].
Example: [192.168.0.100] for IP 192.168.0.100
Note: If this workaround has been applied and you update vCenter to 6.7U3m or higher, this workaround must be reverted to allow mail to send.