Here is how I would approach this:
Pre-reqs:
1- vCenter at same or higher version as Hosts
Make sure vSAN is not holding on to old NodeUuuid for your witness. If vSAN ckuster is still configured then check unicastagents
- From a host CLI run "esxcli vsan cluster unicastagent list"
if you see one marked as witness, remove it using "esxcli vsan cluster unicastagent remove -a <addr> -p <port> -u <uuid>"
Re-enable SC
a- If disabling fails then you may need to turn it off manually
GET state: vsish -e get /vmkModules/vsanutil/stretchedClusterMode
If 1 then it is enabled. If 0 it is disabled.
If enabled (1), turn off by setting to 0
SET state: vsish -e set /vmkModules/vsanutil/stretchedClusterMode 0
b- see my blog about this here https://greatwhitetec.com/2017/01/13/tip-cannot-complete-file-creation-operation-failed-to-place-witnesses/
After disabling SC/vSAN, start the creation of a new cluster.
Hopefully this will clear any old entries and allow you to create the 2-node SC.