When running a 4 node stretched cluster environment it should be possible to use “cheaper” vCenter Server licenses, namely vCenter Foundation. One of the limitations of vCenter Foundation is that you can only manage 4 hosts with it. This is where some customers who wanted to manage a stretched cluster hit some issues. The issue occurs at the point where you want to add the Witness VM to the inventory. Deploying the VM, of course, works fine, but it becomes problematic when you add the virtual ESXi host (Witness Appliance) to the vCenter Foundation instance as vCenter simply will not allow you to add a 5th host. Yes, this 5th host would be a witness, and will not be running any VMs, and even has a special license. Yet, the “add host” wizard does not differentiate between a regular host and a virtual witness appliance.
Fortunately, there’s a workaround. It is fairly straightforward, and it has to do with the order in which you add hosts to vCenter Foundation. If you add the witness VM before the physical hosts then the appliance is not counted against the license. The license count (and allocation) apparently happens after the host has been added, but somehow vCenter does validate beforehand. I guess we do this to avoid abuse.
So if you have vCenter Foundation, and want to build a stretched cluster leveraging a 2+2+1 configuration, meaning 4 physical hosts and 1 witness VM, then simply add the Witness VM to the inventory as a host first and then add the rest. For those wondering, yes this is documented in the release notes of vSphere 6.5 Update, all the way at the bottom.