When using NSX groups to define or compose a Load Balancer Server Pool, if there is an IP that is no longer in use in the Group, the status will show degraded.
NSX 4.1.2.1
Built-in load balancer.
NSX expects there to be an active member at each IP in the pool, since there's one not in use, it treats it as a member that is down.
Edit the VIF config, and add the unused IP to ignored bindings.
This will cause the IP to no longer be used in the Group, and allow the Status to return to normal.
This method could also be used when needing IPs in the group for members that have yet to be deployed, but things are ready to test with the existing set.