Hi,
Your Onprem Server will continue to operate as usual. Once the NVAs are configured, they will handle the translation of traffic between on premises and Azure transparently.
For example, if your onprem server sends out ARP request looking for MAC address for 10.0.0.100, the onprem NVA will encapsulate and send to the Azure NVA, which decapsulates and sends on Azure subnet, and when response comes back the process is reversed so that onprem server receives response.
Above is based on reviewing extended network for Azure documentation and my knowledge of VXLAN.
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Thanks.
-TP