This KB explains the correct method to apply the vSAN license to the vSAN cluster.
Most of the time there is a scenario, where customer is unable to apply the vSAN license as they are trying to assign the license from vCenter > Configure > Licensing.
vSAN license cannot be assigned from the vCenter level as, vSAN is cluster level feature.
There are methods for assigning vSAN license:
1. vSAN Cluster level.
Select the vSAN cluster and >then Configure tab> choose License from the left tab> On the right side you would see the Assign option.
Configure License Settings for a vSAN Cluster
If you have upgraded the vSphere/ vCenter then use the updated License keys accordingly.
Method1
2. vSphere Administration level:
Under Administration > Licensing > Licenses > Assets > VSAN Clusters > Assign license.
Method 2
Note: The vSAN witness appliance is deployed from an OVA file and includes an embedded vSphere license, which does not need to be purchased separately. However, the underlying host server that the vSAN witness appliance is deployed on still requires a vSphere license.