OK, thanks for your reply guys, you were mostly correct. but I did feel the need to actually test this while waiting for reply, here's the final on this:
the host was built in eval mode the same way all hosts are built, it had 48GB of memory. When I tried to add the free lic it first gave me an error stating that it didn't belong to the product. this didn't make any sense. I tried again and got the same error.. very frustrating. One thing to note, I was connected direct to vmnic0 via my laptop on completely isolated network.
I tried again, only the 3rd time I tried I was at my desk connecting to ESXi via vClient (I had internet access from this station), and this time the error message was completely different, it stated that I had too much memory, displayed the amount of memory (48GB), and stated that the lic would only support 32GB.
So the hypervisor does indeed start, but why wouldn't it, its still in eval mode.. and after eval mode is over, I believe ESXi will still boot to hypervisor, but you just can't power on any VMs.
So the tidbit about the hypervisor not starting or booting seems to be incorrect.
If anyone else would like to comment I will keep this post open for a few more days.