Explanation:
https://docs.vmware.com/en/VMware-NSX-Intelligence/4.0/user-guide/GUID-DC78552B-2CC4-
410D-A6C9-3FE0DCEE545B.html

An overlay segment is a layer 2 broadcast domain that is implemented as a logical construct in the NSX-T Data Center software. Overlay segments do not require any configuration on the physical switches, and they allow for optimal east/west communication between workloads on different ESXi hosts. Overlay segments use the Geneve protocol to encapsulate and decapsulate traffic between the hosts. Overlay segments are created and managed by the NSX Manager.
https://docs.vmware.com/en/VMware-NSX-T-Data-Center/3.2/administration/GUID-316E5027-E588-455C-88AD-A7DA930A4F0B.html

Distributed Firewall on VDS is a feature of NSX-T Data Center that allows users to install Distributed Security for vSphere Distributed Switch (VDS) without the need to deploy an NSX Virtual Distributed Switch (N-VDS). This feature provides NSX security capabilities such as Distributed Firewall (DFW), Distributed IDS/IPS, Identity Firewall, L7 App ID, FQDN Filtering, NSX Intelligence, and NSX Malware Prevention.
To enable this feature, the following requirements must be met in the environment:
The NSX version must be 3.2 and later. This is the minimum version that supports Distributed Security for VDS.
The VDS version must be 6.6.0 and later. This is the minimum version that supports the NSX host preparation operation that activates the DFW with the default rule set to allow.

In a Single Tier topology, the Edge node utilizes the following interfaces for ingress traffic:
Tier-0 Uplink Interface: This interface connects the Edge node to external networks, handling north-south traffic.
Downlink Interface for the Tier-0 Distributed Router (DR): This interface connects the Edge node to internal segments, managing east-west traffic between virtual machines.

In an NSX environment, each overlay segment is uniquely identified by a VNI ID (Virtual Network Identifier). The VNI is used to distinguish different overlay networks within the NSX environment and is essential for troubleshooting, as it helps administrators identify specific segments where traffic is encapsulated and isolated.