Windows Server shows APIPA IP as preferred IP on an interface after a reboot

Products

• VMware vSphere ESXi 8.0

Issue/Introduction

When a Windows Server virtual machine is cold vMotioned to a different host or rebooted, the originally configured static IP address is reported as a duplicate.
An APIPA IP is assigned and is treated as the preferred IP when accessing the VM.
VM doesn't respond to originally configured static IP address.

Environment

VMware vSphere ESXi 8.0U3

Cause

When the network interface initializes, Windows sends out "Gratuitous ARP" probes. If another device responds, to avoid a "collision" that would drop packets for both devices, Windows Server "parks" the conflicting IP and assigns itself an APIPA address so it can still potentially communicate with other local APIPA-enabled devices.

Resolution

This is a case of IP duplication, the recommendation is to have a distinct IP assigned to the VM.

Additional Information