Hi everyone,
Obvisouly posting to VM Ware forums didn't produce any substantive feedback so here I am at the HPE side of the house posing the exact same question:
I noticed this on an HP ProLiant ML 380 G7 server running the proper OEM specialized ISO image VMware-ESXi-6.0.0-Update3-9313334-HPE-preGen9-600.9.8.5.4-Sep2018.iso (You are running HPE Customized Image ESXi 6.0.0 Update 3 version 600.9.8.5 released on September 2018 and based on ESXi 6.0.0 Update 3 Vmkernel Release Build 9313334)
HP Serial Attached SCSI Disk shows as "...some functionality might be degraded" even though there's no hardware failure and file system health is good too? I've confirmed that the bare metal has no errors and that the disk array is NOT running in recovery mode due to disk failure or any other cause. It appears that ESXi isn't happy with the firmware level but I am running the latest firmware available from HPE for this Smart Array P410i Controller:
