This issue occurs when the ESXi host does not sync the change for a period of time after an IP address modification is done on the DNS server.
To reduce the number of DNS resolution requests having to traverse the network, the ESXi host DNS client maintains a DNS cache. If the ESXi host has already cached a resolved name and that IP address is changed on the DNS server, ESXi does not get notified of this change and the IP address is incorrect for a period of time.
Clearing the DNS cache forces the ESXi host to query the DNS server the next time this name is accessed. The ESXi host then adds a cache entry with the correct IP Address.