This article explains the impact of enabling deduplication and compression at the storage level for the VMware VMs.
Enabling compression and deduplication on the storage-side LUN typically does not result in any noticeable impact at the VMware layer, as no additional I/O is processed by the ESXi hosts.
However, it is advisable to consult with your storage vendor to confirm whether there are any potential side effects or considerations when enabling these features. Additionally, before making any changes to the storage LUN, ensure that a comprehensive backup of all critical VMs is in place. This precaution will safeguard your data in case any issues arise during the storage-side modifications.