Hi Manish,
It's important that the virtualization environment is inventoried as the servers hosting VM's running IBM software may move machines around, or have their hardware resources adjusted over time. When that checkbox is enabled FNMS uses the discovered device records to identify any virtualization infrastructure (VMWare/Oracle VM) and the beacon responsible for the subnets those devices are in will then automatically initiate collection of VM inventory.
If you're service account is getting locked out I'd suggest it is most likely to be related to what accounts you have set up in your password store on the beacons. You might need to consider ensuring there is a specific account for VCenter/Oracle VM and then use filtering to make sure only the appropriate accounts are used for the task.
The online help has some more detailed info about the effect of the setting you refer to:
https://helpnet.flexerasoftware.com/fnms2019r1/EN/WebHelp/index.html#tasks/InvSet-IBMPVUSection.html
