ARP Proxy not working on Standalone T1 with Load Balancer

Products

• VMware NSX Networking

Issue/Introduction

Symptoms:

• Installation of NSX on version 2.4.x or 2.5.x
• Standalone T1 connected via Service/Centralized Port to a Logical Switch (VNI_01).
• One arm load balancer hosted on Standalone T1 (T1+LB).
• LB VIP is on the same subnet as the Service Port IP.
• Second Logical Switch (VNI_02) connected to the same Tier-1 (T1).
• Tier-1 (T1) connected to Tier-0 (T0) working as gateway of the Logical Switches (VNI_01) and (VNI_02).
• VM's from VNI_02 have IP connectivity to VM's on VNI_01 and the Service Port IP, but does not have connectivity to the VIP of Load Balancer.
• Both Load Balancer VIP and CSR IP are reachable for traffic North > South going through the Tier-0 (T0) then Tier-1 (T1).

Environment

VMware NSX-T Data Center

Cause

This is due to an known issue on the T1-DR which causes it to drop ARP requests from the VIP.

Resolution

This issue is resolved in VMware NSX-T Data Center 3.0, available at VMware Downloads.

Workaround:

Add a static route on T1 for VIP address (x.x.x.x/32) and next hop as Service Port Interface's IP. 
Example: