You are trying to modify or create a Service Mesh and get the following error:
The configured Service Cluster in the associated Compute Profile has HA enabled, with HA Admission Control configured.
VMware HCX
During the deployment of new Service Mesh appliances, HCX queries the vCenter responsible for the service cluster for a placement on one of the hosts. If HA is enabled with Admission Control on this target cluster, vSphere may deny the placement and instead return an error code of "Insufficient resources to satisfy configured failover level for vSphere HA."
if the system resources currently in use on the cluster do not leave enough capacity to accommodate the VMs, and would spill over into using the reserved Failover Capacity.
This is an expected behavior. On a 2-host cluster, admission control reserves 50% of the resources, allowing you to power-ON only 1 host worth of VMs on this cluster. This is to ensure that in the event of a single host failure, all VMs can be restarted successfully on the only surviving host.
Workaround:
This allows the Service Mesh tasks to obtain a valid host placement in the service cluster for the appliances, and for the Mesh modification or creation to proceed.
For long-term resolution, one or a combination of the following options will be required: