Hope you can reproduce this.

Because I also have this while creating a host thats not based on an image.

Doesn't mater if I use dvPortGroup or dvSwitch2-DVUplinks-253. (Although not sure if both should be available for selection)

Not sure why but during the 10 test that I did that where about creating a host (not image) I once got the below unexpected error but host was still created.

Warning!
undefined method `json?' for nil:NilClass

Might have to do with host name "new"?

Started GET "/hosts/new.localdomain" for 192.168.88.1 at 2014-04-29 12:19:08 -0700
Processing by HostsController#new as
Operation FAILED: undefined method `json?' for nil:NilClass
Rendered common/500.html.erb (4.0ms)
Completed 500 Internal Server Error in 8ms (Views: 6.1ms | ActiveRecord: 0.4ms)

Yes can reproduce. Hosts with name new produce the undefined method `json?' for nil:NilClass error.

Luckily we don't create host with such a name in production.

I am seeing the same behavior without distributed port groups.

Does it even make sense to talk about labels for non-distributed port groups?

Ad. the original issue, we've seen this behavior, if some VMs were mistakenly set
to the specific network, but non-distributed ports, the standard network started
being used as the default one.

The solution seems to not group the network interface just but the network name, but
having there also selection for every possible label.