This issue was fixed in Oracle Solaris 11.3.2.4.
If an I/O domain diagnoses a fault against a device to which it has direct access, the fault information is visible in the primary (that is, control) domain and in Oracle ILOM, as well as in the I/O domain that diagnosed the fault. However, if you attempt to repair the fault from Oracle ILOM, the repair action fails. No error message is displayed, but the fault is still present if you execute subsequent fmadm commands from the I/O domain.
Recovery: If you encounter this bug, execute the fmadm repair command in the affected I/O domain and the repair operation works as intended.