I observed this in my homelab while multiple nested ESXi were not available. If you create a Desktop Pool in Horizon 7 (and I guess earlier as well) the following meaningful error might show up during the select of a host or cluster resource:
java.lang.IllegalArgumentException: Invalid paramaters during Cluster selection
Going through the Connection Server log files I figured out the java exception is called when the vCenter is crawled for all available Hosts and Clusters.
The routine is crashing when it hits an disconnected or not-responding ESXi host within the inventory.
Make sure every ESXi host is in a connected state.
ESXi hosts within some maintenance can really steal the show right here.
Make sure to get rid of this ESXi host by fixing the host or removing the host from the inventory. Please be aware of that a remove will also affect the your distributed switch.