Er(163) Hostd[]: [Originator@6876 sub=Hostsvc opID=vim-cmd-<ID> sid=<ID>user=root] OSData config validation failed OSData can only be a subdirectory of a VMFS volumeVMware Cloud Foundation 9.0.x
A local persistent media is not provided along with the SD Card during the initial setup. As a result, the OS Data partition is never created. Creating a OSDATA partition later doesn't provision it as a local filesystem (filesystem type VMFS-L or VMFSOS) so it isn't recognized as a valid configuration.
Refer SD card/USB boot device revised guidance
Even though the support for SD card as a boot media is still retained, we do not guarantee the viability of SD cards as a boot option. If a persistent local device is not available as a boot device, SD cards can be used for boot bank partitions However a separate persistent local device to store the OSDATA partition (32GB** minimum, 128GB** recommended) must be provided.
Provide a valid persistent media at the time of the initial bootup/deployment for the OSDATA partitioned to be provisioned correctly with the appropriate filesystem type.