VXLAN bridge or gateway overview
A VTEP acts as a bridge or gateway between end nodes, such as VMs, servers, and PCs, and the VXLAN overlay network.
VXLAN Packet Processing
For incoming frames received with VXLAN encapsulation over the VTEP source interface, the Firewall Threat Defense strips out the VXLAN header and forwards it to a physical interface connected to a non-VXLAN network based on the destination MAC address of the inner Ethernet frame.
The Firewall Threat Defense always processes VXLAN packets rather than forwarding them untouched between two other VTEPs.