Hello TryllZ,
"I have been looking through design considerations for vSAN, I am not able to find a configuration that shows how to go about 3 ESXi hosts in a vSAN and a Witness."
That's because that is not a recommended configuration.
"For a 3-node design it shows 2 hosts plus a witness, no where have I been able to find a configuration with 3 ESXi hosts and a Witness, and the fact that vSAN requires 3 hosts in a cluster is confusing, am I misunderstanding something."
So, the two 3-node configurations that would require a Witness are as follows:
1+1+1 Stretched cluster - one data-node at each site and Witness at 3rd site to store the witness components and determine quorum in the event of failure of one site or network communication loss between the data-sites.
2+1 DirectConnect - basically two data-nodes connected without a switch and Witness stored elsewhere for witness component placement and determining quorum in the event of a node/Disk-Group/controller/hardware failure on one data-node.
"Could some one explain a scenario with 3 ESXi hosts, and a witness."
If you want to configure a 3-node cluster then you have three recommended options, either as a either of the above or just as standard 3-node cluster with 3 data-nodes and no witness.
The only use-case that a lop-sided 3-nodes + Witness cluster would make sense is a 2+1+1 cluster with some disposable FTT=0 VMs pinned to the site with 2 data-nodes.
Bob