License mobility means that a license that has been assigned to a physical device is transferred to another physical device without a waiting period, as stipulated by Microsoft general licensing terms that do not permit such transfer within 90 days (minimum entitlement period).
The license mobility is automatically taken into account by license models, which affects the license requirements for physical devices. The quantity of virtual machines that have been hosted within the minimum entitlement period (today minus 90 days) is either ignored (license mobility = yes) or taken into account (license mobility = no).
Please note that a license requirement for a physical host is not deleted even if license mobility applies.
In example below you can see that while the ESX host does not run any virtual machines currently, the VM history shows two former guest systems (not all of them with identical software installed).
The SQL Server Standard 2008 R2 license requirement for the host references the primary license requirement for the QMPLFSTORE07 former guest as foundations. Due to the license mobility of the license model, the license requirement needs "0" usage rights – i.e., no license is required.
As long as the actual minimum entitlement period has not expired, the license requirement for the host is not deleted for transparency purposes. As soon as the minimum entitlement period expires, the license requirement is deleted (provided that there are no other relevant foundations for its existence).