In the default mode of the VPC CNI, without prefix delegation, singular IP addresses are assigned to ENIs.
With prefix delegation, a range of IP addresses is assigned to an ENI. Traffic to an address within the assigned range is directed to the ENI. This greatly increases the number of IP addresses, and thus pods, that may be on a single node.
More specifically, you can assign a private CIDR range (network prefix) to your network interfaces (ENIs) on EC2 instances. IPv4 and IPv6 ranges may be assigned to an ENI. The prefix assignments may be manually or automatically managed.
Amazon VPC CNI assigns network prefixes to Amazon EC2 network interfaces to increase the number of IP addresses available to nodes and increase pod density per node. You can configure version 1.9.0 or later of the Amazon VPC CNI add-on to assign IPv4 and IPv6 CIDR instead of assigning individual IP addresses to network interfaces.
[[GDC: JC do you prefer "ENABLE_PREFIX_DELEGATION is set to true" as the first line (techincal accuracy) or "When prefix delgation is enabled" (more general, users should follow the link to learn how to enable)]]