Well after many hours of debugging the issue was not with hosts but with the ovirt-engine.
We didn't think it was the engine because we had successfully redeployed the engine on
the first host. However it was the engine and it was due to the fact it was running the
latest version of ansible 2.14.2 which uses python3.11. Unfortunately python3.11 does not
have all the module yet compiled for this version so the adding of the host failed due to
the netaddr module being missing. So we put python3.6 as the default version on the system
because vdsm and other service need this version. We then copied from python3.9 the module
netaddr to the python3.11 module folder. At this point we could reinstall the hosts.
Somebody else had exactly the same problem at the same time and you can read the issue
report here.
https://github.com/oVirt/ovirt-ansible-collection/issues/695