Certificates provide digital identification and a mechanism to establish trust. We can think of a certificate as a driver's license or a government-issued ID card. The trusted root authority can be thought of as the government in this example. The license or ID can be thought of as the certificate. When someone checks our ID to verify our identity, they trust the authority that issued that ID. Likewise, when a certificate is issued from a trusted authority, we can be assured that the identity represented by the certificate is genuine.
The default installations of both an ESXi host and vSphere are configured to use self-signed certificates. A self-signed certificate, as the name implies, is signed by the host machine on which the software is installed. Subsequently, there is no inherent trust between each machine since the certificate signature differs from machine to machine. A self-signed certificate is akin to a fake ID using our analogy.