Does --rotate parameters work with backup over IP?
From what I understand, when backup is done over IP, it will create a folder with a timestamp and backup into the folder.
However, I've tested --rotate=1 or --rotate=1D but the old backups does not get removed.
Our aim is to backup over IP and to remove the old backup folder everytime a new backup is being executed.
Please advise if this is possible
We aren't really understanding you. What you are describing is a replica, not a backup with rotation.
If you backup a VM and keep just one restore point, that is the same as having a single replica, still you will be taking a lot of time to backup your data when compared to replicate and you won't have the advantage of a replica, which is immediate readyness to be switched on.
To keep just an image of a VM over IP run:
./xsibackup --replica "VMs(YOUR_VM)" firstname.lastname@example.org:22:/vmfs/volumes/datastore1
You should understand that that won't offer you any level of protection unless you accomplish some aditional job on the replica. Shoul you be infected by some ransomware per instance, your replica will be almost immediately affected and your recovery options will be zero.
The backup on the remote server would be NAS storage and the VM would not be switched on unless restored to the source server.
Is replica still applicable in this case?
Yes, you can replicate anywhere you want, since you can replicate to any remote FS over IP/SSH.
Please, let us politely insist that what you are planning to do makes no sense at all from a disaster recovery perspective. Independently of whether you will switch the VM on or not, that is irrelevant. In fact it is very recommendable to switch the remote VM on from time to time to make sure that your replica is indeed working, our replica algorithm allows you to do so while still preserving the replica consistency.
Any problem in the original VM will be almost immediately transmitted to your replica. Let's say that you are affected by some ransomware?, what would you do to recover your data?
Let's say we went with the --backup over IP option. Does --rotate parameter works with backup over IP?