There is a known vSphere issue with this upgrade that is very similar, but not the same as I experienced. My upgrade to vSphere 7.0u3 was successful. Only then did I receive any error messages.
vSphere HA host status Cannot find vSphere HA master agent
After hours of troubleshooting and a support case that went no where, I finally resolved this issue!
The main cause of the issue was the new FDM VIB would fail to install on the host and received this error when trying to install the VIB manually:
ValueError: Expected 1 component, found 2
Starting with vSphere 7.0 Update 3, the inbox i40enu network driver for ESXi changes name back to i40en. The i40en driver was renamed to i40enu in vSphere 7.0 Update 2. The name change impacted rollup upgrade path, where on impacted workflow i40enu would not be replaced by i40en, which causes errors for import image (host seeding) and Baseline Image managed cluster to Desired Image managed cluster transition workflows.
My resolution was to remove the i40enu VIB from each host in the cluster and reboot.
esxcli software vib remove --vibname=i40enu
rebootOnce all of the hosts had the VIB removed, I was able to turn HA back on for the cluster and the HA agent was finally able to install and HA was now running on the cluster.
From VMware:
IMPORTANT NOTE:
Post upgrade to 7.0 Update 3, do not apply 7.0U2x based baselines or the “critical host patches” baseline until fix for this issue is made available in future patches. Otherwise, you may hit a similar issue again