VTEP Source Interface
The VTEP source interface is a regular interface (physical, EtherChannel, or even VLAN) with which you plan to associate all VNI interfaces. You can configure one VTEP source interface per threat defense virtual. Because you can only configure one VTEP source interface, you cannot configure both VXLAN and Geneve interfaces on the same device. There is an exception for threat defense virtual clustering on AWS or Azure, where you can have two VTEP source interfaces: a VXLAN interface is used for the cluster control link, and a Geneve (AWS) or VXLAN (Azure) interface can be used for the Gateway Load Balancer.
The VTEP source interface can be devoted wholly to VXLAN traffic, although it is not restricted to that use. If desired, you can use the interface for regular traffic and apply a security policy to the interface for that traffic. For VXLAN traffic, however, all security policy must be applied to the VNI interfaces. The VTEP interface serves as a physical port only.
In transparent firewall mode, the VTEP source interface is not part of a BVI, and you do configure an IP address for it, similar to the way the management interface is treated.