When a VM spawned on VLAN network trying to reach external network(i.e SNAT), OVN(core ovn i.e ovn-controller) is redirecting this traffic from compute node to SNAT gateway node through tunnelling. As tunnelling overhead is added to the packet during redirect, this has to be considered when assigning MTU to VLAN network (during network creation).

But we can't hard code MTU (MTU - tunnel overhead i.e 1500 - 50)for vlan networks as this can impact  provider VLAN networks created on gateway node by admin user for external connectivity (which can't have this restriction as  traffic through this network is not redirected). 

This is a limitation in core OVN. Till this limitation is addressed in core OVN, we need to block tenants creating VLAN networks with OVN driver. Because of these reasons, OSP Director/Tripleo in OSP13 doesn't allow tenants to create VLAN networks.