Using NSX for vSphere and the NSX license allows for Distributed Virtual Switch capabilities.
You have already connected your host to a DVS, provided by the NSX license.
When trying to apply a Standard license to a host, you receive an error similar to the following: "Host does not have valid license for vds"
The issue is with the order in which the license was applied.
To workaround this issue, you need to remove the host from the DVS connectivity first. Then, apply the license to the host.
Once the license is applied, you can re-connect the host to the existing DVS.