We have 2 physical servers (A and B), each with ESXI 7.0 installed. We'd like to manage them with vCenter. Can we install vCenter on one of those servers? Is it advisable?
Can we install vCenter on one of those servers?
Yes absolutely, in fact that's kind of the default scenario.
Is it advisable?
Sure, why not.
I'll give you a little more info. For larger installations - tens/hundred of hosts what you often see is a small 'management' cluster to run these central VMware tool VMs (vCenter, vROps, Log Insight, NSX controllers etc.), usually 4 hosts or so, maybe 6-8). Then you have one or more workload clusters with the rest of your hosts. All of these servers are managed by the vCenter. The reason you separate these out is that often these management VMs have slightly different use case than the general computer clusters - as an example if your vCenter crashes (and you're not running in HA mode) then you need to find which host is running the vCenter (due to DRS moves) so you can restart it and deal with any issues with it. It's easier to find it if it's a small 4-8 host cluster than a larger one. Also you don't want to run NSX on the hosts that are running the NSX controllers typically.
So for larger installation then yes, I'd have a small management cluster to run the vCenter, but if you only have two servers then you don't have that luxury, in which case then yeah, just get on with it, you'll be fine!