Hotadd is adding the disks to the virtual VSA proxy. At this pint hotadd feature ends. The rest is related to the configuration of the library, meaning if the VSA proxy is also the Media Agent having R/W access to the library.

Thank you Jacek for your quick response, We are deploying the one VSA & 2 MA servers in my environment, Can you please elaborate the data & meta data flow from ESxi to backup storage. Means is it from individual VM’s or ESXi hosts.

And for adding the disks to VSA proxy requires more space?

VMFS-5 uses a consistent file block size and can handle volumes up to about 60TB, how can we allocate the VMFS-5 feature to perform the backup?

The flow looks like this:
Snapshot of the backed up VM is being created, the R/O locked base vmdk file is then attached to the VSA proxy. VSA proxy is reading the block data from the attached vmdk (with CBT or w.o CBT depending on the configuration). Metadata and data under the backup is then sent to Media Agent saving the data to the library.
No “additional” space is needed anywhere apart from the space used by VM snapshot.