The Ethernet switch does not need to support Layer 3 services or be licensed for Layer3 services. You can enable routing services further upstream on the network infrastructure, or enable routing services at this ToR switch.
A VxRail cluster can be deployed in a flat network using the default VLAN on the switch. It can also be configured so that all the management, storage, and guest networks are segmented by virtual LANs for efficient operations. For best results, especially in a production environment, only managed switches should be deployed, and VLANs should be used. A VxRail cluster that is built on a flat network should be considered only for test cases or for temporary usage.