With vSAN 6.7 new on-disk format is available , version 6.0 . And after the upgrade of vSAN infra you can upgrade on-disk format to latest version .In on-disk format version 5.0, no data evacuation is performed as the disks are reformatted but in on-disk format version 6 upgrade data evacuation will be performed .
The disk group is removed and upgraded to on-disk format version 6.0, and the disk group is added back to the cluster. For two-node or three-node clusters, or clusters without enough capacity to evacuate each disk group, select Allow Reduced Redundancy from the vSphere Client.
What happens with Reduced Redundancy
When you choose allow reduced redundancy, your VMs will be unprotected at the time of upgrade .This method does not evacuate data to the other hosts in the cluster . It will remove each disk group, upgrades the on-disk format then adds the disk group back to the cluster ,all objects remain available with reduced redundancy.
If you enable deduplication and compression during the upgrade to vSAN 6.7, you can select Allow Reduced Redundancy from the vSphere Client.
Navigate to Cluster ->vSAN->General and you can see the On-disk Format version is will have warning message and you can perform a pre-check to check the status .
If the pre-check is success and confirms ready to upgrade , you can perform upgrade .
Based on the number of nodes on the luster or requirement you can choose the Allow reduced Redundancy option and click YES to proceed upgrade .
And you can monitor the progress of the upgrade
Once the upgrade is completed you can check the Disk Format version , All the disks will be having latest version
on-disk format version 6.0