Physical hardware failure is inevitable, this is true whether it is running in your on-premises datacenter or in the Cloud like VMware Cloud on AWS. Although vSphere HA will automatically restart all affected VMs after detecting a host failure, there is usually additional activities that must be performed by a customer such as notifying all impacted application owners and even creating an incident ticket for hardware replacement.
With VMware Cloud on AWS, the hardware replacement is done automatically for you but the downstream activity of notifying application owners to verify the application is functional is still managed by the customer. There are many ways in how customers can manage such incidents and one solution that I am a huge advocate of is taking advantage of the powerful vCenter Server Events, which has over 1700+ events, not to mention any of the 2nd/3rd party events.
When an ESXi host fails, the com.vmware.vc.HA.DasHostFailedEvent event will be generated which contains all the relavent information related to the host failure including the specific hostname/IP, when the incident occurred and details about the vSphere Cluster and Datacenter is also provided. This information is visible using the vSphere UI but it can also be programmatically retrieved using the vSphere API, which is how the vSphere UI renders this information.
Note: Everything described in this blog post including the VEBA example is applicable to any environment that contains vCenter Server and is not limited to just VMware Cloud on AWS.