Routes origin for locally connected VMs and/or Subnets is being mistakenly set as STATIC. The origin of the routes should attend to this classification:

BGP - Indicates Routes Imported via BGP into ODL

CONNECTED – Every subnet (for example a VPN) has a route directly connected
for that subnet. Same description than Cisco (all /24 for us)

STATIC - The static routes introduced by the OpenStack command “extra routes”

SELFIMPORTED - Indicates this Route is replayed route on a new BGP VPN,
which is importing RT from another BGPVPN which originally owns
this route

LOCAL - https://supportforums.cisco.com/document/63281/local-host-routes-routing-table
(basically /32 host routes).

INTERVPNLINK – Indicates Routes replayed by InterVPNLink due to
Route Leaking. Inter-VPN link is configurable for leaking BGP,
connected and/or static routes. LOCAL routes are not leaked,
this is why this change is introduced.

This classification has been taken from Cisco documentation and forums, and adapted to our own use case.

So according to above, Routes to VMs should be tagged as "LOCAL" and routes to Subnets should be tagged as "CONNECTED". This is an example of how the route origin should be set:

opendaylight-user@root>fib-show
RD Prefix NextHop Label Origin
-------------------------------------------------------------------
42962... 10.4.4.1/32 192.168.101.35 70005 l
42962... 10.4.4.2/32 192.168.101.40 70006 l
42962... 10.3.3.2/32 192.168.101.40 70007 l
42962... 10.3.3.1/32 192.168.101.35 70008 l
200:2 172.20.20.0/24 192.168.101.25 70011 c
200:2 172.20.20.30/32 192.168.101.25 70012 l
200:2 172.20.20.31/32 192.168.101.40 70013 l
100:1 0.0.0.0/0 5.5.5.5 70003 s