So I am also trying to test this inner VLAN tag through VXLAN for the sake of labbing some virtual routers as an analog for production routers. I have been able to get this partially working with the following setup:
- Logical switch set to multicast backing
- Disabled IP address and MAC address learning on the logical switch
- Distributed port group for logical switch changed to allow promiscuous, allow forged transmits, allow MAC changes, and set to trunk VLANs 1-4096
With this configuration I can confirm communication between two VMs, each using VLAN tag 10 on their traffic between each other. This also works across the layer 3 boundary by putting each VM on a separate host.
BUT the problem is that any broadcasts such as ARP do not transmit across hosts, only within the same host. So in order to fill the ARP table of the VM, both VMs must be on the same host to see each other's ARP requests. Once ARP is populated, then they can be split to different hosts without issue.
So, any thoughts on keeping broadcasts flowing between the two hosts?