IP addresses in the range of 169.254.0.0/16 are Automatic Private IP Addressing (APIPA) addresses, which devices assign themselves when they are configured to obtain an IP automatically but are unable to reach a DHCP server to get one. The most likely cause for VMs in a cluster to receive APIPA addresses is the exhaustion of the DHCP scope, meaning there are no more available IP addresses in the DHCP range to be assigned.