Distributed mode is used when the different functions in Nexus Hybrid Access Gateway are distributed to several virtual appliances. A typical case is when you want to enforce the access in one appliance (PEP, Policy Enforcement Point) and process the authorization and authentication requests in one appliance (PDP, Policy Decision Point). In this case you will need two appliances. One that runs access point and another that runs the other Hybrid Access Gateway services.
There can be only one administration service in a node network. The appliance that runs administration service can be toggled to and from distributed mode. When toggling from distributed mode, no other than the services running locally on the appliance can be a part of the node network. Toggling an appliance with no administration service to and/or from distributed mode in general doesn’t make sense since there is no local administration service. Once a service has successfully connected to an administration service, then that service cannot easily be switched to work with another appliance's administration service.