The situation is that the IPs were registered on one VSWITCH, and passed on to real switches in the external network. Later, another host registered the same IPs on a different VSWITCH, which failed to pass them on to the external network (rejected because they were dups). The 2nd VSWITCH detected this error, but retained the IPs (for itself) anyway. The question is whether the 2nd VSWITCH should have retained them given it knew they were dups.
I'd argue yes, because the VSWITCH has no way to determine that they are already registered in another switch. There's no existing network protocol to communicate that information between the two switches (nothing like ISL or 802.1q for layer 3). The two VSWITCHes are two separate entities that can't know that the address is already registered elsewhere. Switch to layer 2 if/when you can. It simplifies a lot of things.
