A virtual switch (vSwitch) is similar to a physical switch, but it is a built-in component in your hypervisor.
How a virtual switch differs from a physical switch
The number of ports: one a physical switch, you have a defined number of ports. If you need more ports on it, you must upgrade the switch or replace it entirely. A virtual switch is scalable compared to its physical counterpart as you can simply just add more ports.
The virtual switch also performs the same functions as a physical switch, with the exception: of how the MAC address table is handled.
The virtual switch only cares about the MAC addresses of the VMs logically attached.
It doesn't care about everything else, since all other MACs can be sorted out after forwarding the frame to a physical switch.
When a physical switch doesn't know the port a MAC address is associated with, it floods the frame to all the active ports.
If the MAC address is unknown, the virtual switch will forward it to a physical switch via the uplink port and allow the physical switch to forward the frame.
This is how we can achieve low latency switching on a hypervisor virtual switch.