Prerequisite is because multiple components relied on the dns only.
e.g. SSO will not work if the dns not setup correctly.
User authantication will raise problems.
domain join will not work.
mks problem will raise frequently.
Enterprise will work on AD authentication and AD depends on DNS and dns works when fqdn is correct.
And so much on.
thats why its in to prerquisite for creating a fqdn for your vcenter and hosts as well.