This is a known issue and documented in the release notes:

‘If bring-up fails when deploying the second Platform Services Controller (psc-2), retrying bring-up will fail with the error Failed to apply default vSAN policy. The cause is that the original deployment of psc-2 was not removed from the vCenter Server inventory.’

Release notes: https://docs.vmware.com/en/VMware-Cloud-Foundation/3.10/rn/vmware-cloud-foundation-on-dell-emc-vxrail-18-release-notes.html

The workaround as per detailed in the release notes is a follows:

Log in to the vCenter Server. From here you can see there is a psc-2 (orphaned) present which occasionally occurs during the bring-up that two psc-2 appliances get deployed resulting in one being orphaned:

Delete the orphaned psc-2:

Rename the remaining psc-2 by removing the (1) as per this example vcf3xpsc02 (1) gets renamed to vcf3xpsc01:

Retry bring-up is successful: