There are several approaches to resolve this issue:
If the TPM is enabled on the host and encryption is required to be enabled -
- Enable the ESXi encryption mode by selecting the ESXi host, Configure and then Security Profile.
- Under the Host Encryption Mode, click the Edit button and then change the mode to Enabled and click the OK button.
If encryption and TPM functionality is not required -
- Log in to the vSphere Client.
- Navigate to the vCenter Server object in the inventory.
- Go to Configure > Alarm Definitions.
- In the filter field next to "Alarm Name", enter "encryption".
- Select the radio button next to "Host Requires Encryption Mode Enabled Alarm".
- Click the EDIT control.
- In the alarm configuration dialogue, click NEXT until you reach the "Review" screen.
- Find the "Disable this alarm" option and select it.
- Click SAVE to apply the changes.
After applying any of these solutions, monitor the vSphere UI for 24 hours to confirm that the alarm is no longer triggered.