ipaddress is a string so can not have multiple items in one go. So need to loop for allowed IP addresses as a PowerShell Arrays, if many.

In case Ip already exists in rule, it gives error: InnerText: Ip address already exist.EsxCLI.CLIFault.summary

$arguments = $EsxCli.network.firewall.ruleset.allowedip.add.CreateArgs()
$arguments.rulesetid = $Service
$arguments.ipaddress = $IP
$EsxCli.network.firewall.ruleset.allowedip.add.Invoke($arguments)

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references:

The ESXi host must configure the firewall to restrict access to services running on the host.