Hi,
In this case host-based means he HMP license is tied to a MAC address (NIC) on the physical system. Alternative option is where the HMP license is tied to the Serial Number of the DNI board in place. Sometimes there could be a system level issue where the host or MAC is not accessible or is being blocked from the system and thus cannot be matched to that encrypted in the license so it fails with that error as well.
Also seen where the system has more than 5 NICs, and Flex can only read the first 5 in the priority list, and issue occurs if HMP license is tied to a NIC at a lower priority level.
Jeff