The mlag peer alternate ipaddress is a function which disables the mlag ports on the mlag peer when the ISC link goes down. Both MLAG peers exchange health-check messages over this alternate link only when the ISC link goes down. The ISC link is determined from the ports in the vlan on which the mlag peer is reachable. It is advised to make this link as robust as possibel for example by using a LAG for this. In case the ISC link does go down the alternate IP address for the peer is used to exchange health-check messages.
Because the alternate ipaddress is only used when the ISC link is down, it is important that the ports used to reach the alternate mlag peer IP are NOT the same ports as the ports for the ISC link. A common method to use is using the mgmt ports ip addresses (VR-MGMT) as alternate mlag peer ip.