vSphere 7.0
vSphere 8.0
During the vm powering on, it 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 expected behaver.
Workaround:
1. To disable resource reservation or modify the reserved capacity in HA
In the vSphere Console, navigate to the cluster experiencing the issue and do the following: Configure > vSphere Availability > Edit vSphere HA > Admission Control > Disable Host Failover Capacity or Modify the Reserved Capacity
2. To increase sufficient resource in the cluster.
3. Migrate to the other cluster which has sufficient resource.