I have the exact same error as the topic starter.
Topo:
8-node vSAN cluster in the main datacenter (datacenter A). Our vCenter (VCSA 6.5 U1) lives here.
A remote 2-node, v6.5 U1 direct-connect vSAN cluster (datacenter B)
A classic ESXi cluster in a 3rd datacenter (datacenter C) which hosts several witness-like appliances from various vendors). There is no vSAN here.
So I deployed the 6.5 U1 witness appliance in Datacenter C, added it to the cluster there and told the 2-node vSAN cluster in datacenter B to use that witness-appliance.
Result: the witness-appliance complaining "Host with vSAN service enabled is not in the vCenter cluster".
What I think it complains about, if you take that message literally, is that it wants the witness appliance to live in the same cluster as where vCenter lives. In our case that would be Datacenter A. Why would it want that??
It makes no sense, so it smells like a bug to me.