I am not going to spend much if any time on this.
Do you recall this graphic:
All that you need to know is that the Customer Address must be a known thing. You need to know the IP address of your VM, the MAC or your VM, and how you are going to forward your VM traffic (encapsulation or IP Rewrite) prior to the next step.
Remember, if you use IP Rewrite – each CA needs a unique PA. If you use encapsulation you can have one PA support multiple CAs.
IP Rewrite gives high compatibility but is more to manage, Encapsulation is easier to manage but might not work in all cases (actually, I know cases where it fails).
The CA is the IP of the VM. There can only be one LookupRoute defined per CA + VirtualSubnetID. Remember, VirtualSubnetID is your isolation boundary, within the CustomerRoute, but cannot be used more than once within a datacenter.
This can also be thought of as the IP that defines the target route – as a remote CA is actually the target of any packet.
And, most important – in the WNV model, this is the IP that the customer brings with them. There can be duplicates, but not for a single customer – as that would duplicate too many settings and create conflicting routing rules.
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