I did exactly what you suggested and the index backup is still a full .
I think it is time to open a SR with DELL EMC now.
Thanks anyone for the help so far. I will let you know what the support brings up.
This can happen when someone messes up with /etc/hosts and changes order of short and long names (fqdn). I agree that having alias in server's client should make NW smart enough this is the same client, but something somewhere in the code makes it act differently.