Avamar: Proxy Deployment Manager Error - Invalid Domain

When trying to deploy a proxy by Proxy Deployment Manager, it always failed with error could not register the proxy: invalid domain

MCS log shows that Avamar Server already has this client.

mcserver.log.43:FINE: Cl->MC 10.100.1.201:32876<client isclientos="0" type="init" ack="yes" fqhostname="usivnavmp001.sus.local" msgver="1" os_type="Linux" hostname="usivnavmp001.sus.lcal" client_type="VPROXY_GUEST" mcsaddr="10.100.1.200" uuid="4206c9d11fc2d8ef735d2c816c90712c" dpndomain="/" cid="0" version="7.4.101-58" secure-st-version="2"><DNSname>127.0.0.2</DNSame><DNSname>usivnavmp001.sus.local</DNSname><DNSname>usivnavmp001</DNSname><DNSname>10.100.1.201</DNSname></client>
mcserver.log.43:FINE: client connection called id indicates:10.100.1.201
mcserver.log.43:FINE: Paging will be disabled on client connecting from 10.100.1.201 because the client did not provide a paging address when connecting
mcserver.log.43:FINE: MC->Cl 10.100.1.201:32876 <message  errno="202" errdesc="Proxy client already exists as a client for image backup." msgver="5" ack="no" type="response" sync="fg"hfsaddr="10.100.1.200"  />

deploymanager.log in /usr/local/avamar/var/log/vcs shows the below error:

avagent.d Info: Stopping Avamar Client Agent (avagent)...
avagent.d Info: Client Agent stopped.
avagent Info <5008>: Logging to /usr/local/avamarclient/var/avagent.log
avagent Error <7531>: Unable to register /deab/proxy01.av.local with Administrator 192.167.191.29:28001
'Proxy client already exists as a client for image backup.' (202)
avagent.d Info: Client activation error.
avagent Info <5008>: Logging to /usr/local/avamarclient/var/avagent.log
avagent Info <5417>: daemonized as process id 14474
avagent.d Info: Client Agent started.

The issue happens for two reasons:

Reason 1:
On the affected Avamar Server, there was a rule configured to add VMs to Avamar Server automatically. During proxy deployment, the VM is created in vCenter and automatically added to the Avamar Server by rule before self-activation. Therefore, the following error was logged by MCS when the proxy tries to register itself later.

Proxy client already exists as a client for image backup

Reason 2:
There is a dynamic container set on Avamar meaning that any new client created on the vCenter will be added under it thus gets added as a VM causing the following error.

Proxy client already exists as a client for image backup

Example of a container added as ESXi with a proxy added under it as VM image backup client:

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For reason 1:

1. Open Avamar UI, click Tools-->choose Manage Rules
2. Check the rule configured and ensure that a new deployed proxy is not added to Avamar automatically

For reason 2:

1. Open Avamar UI, click Policy tab-->choose Clients (besides Groups) from left pane
2. Click the container (ESXi in the following example) and click Edit then locate the flag Dynamic Mode:
   
3. Clear Dynamic Mode and run the proxy deployment manager task again: