This article describes the ARP reply setting in Virtual IP/IP Pool.
The 'set arp-reply disable' is used in the case when IP addresses are overlapping with another device in the network. With arp-reply disabled, FortiGate should send an ARP request for the addresses defined in the VIP/IP pool if it needs to send traffic to units that owns these IP addresses.
The 'set arp-reply enable'(default) command means that FortiGate will answer ARP requests for the IP address(es) mentioned in the VIP/IP pool.
Before FortiOS 6.4.9 / 7.0.1 all IP addresses in the IP pool and VIP are considered as local IP if arp-reply is enabled (following the FortiOS logic one IP can be bound to one interface). In FortiOS 6.4.9-6.4.14 / 7.0.1-7.0.12 / 7.2.0-7.2.5 / 7.4.0, the IP pool / VIP IP addresses are no longer considered local.
This change was reverted in versions 6.4.15, 7.0.13, 7.2.6 and 7.4.1. From these versions onwards, IP pools and VIPs will again be considered as local IP addresses.