Single host outside a cluster at the Datacenter Level not able to use vSphere Native Key Provider (NKP)
vCenter 7.x
vCenter 8.x
ESXi 7.x
ESXi 8.x
vSphere Native Key Provider (NKP) requires host(s) to reside inside a Cluster Object
Hosts must be inside a vSphere cluster object.
However, you can put a single host inside a vCenter Server cluster object to leverage NKP
From vSphere Client >Hosts and Clusters Menu > Datacenter Object > Right Click on Datacenter Object and create new cluster > Define cluster naming convention in pop-up menu and complete
Next Go to Single host that resides at the Datacenter Object and drag and drop into Cluster object that was created
The vSphere Native Key Provider (NKP) can now be utilized on the Single host
https://www.vmware.com/docs/vsphere-native-key-provider-nkp-questions-answers