No more freezes, no more stuttering, no more massive frustration. Given the fact that the feature exists, and the statements made, I thought that the issues were v16 issues (maybe they are) but I finally decided to disable WSL2 / HyperV and have found my VMware Workstation performance to be excellent. ' Run Workstation virtual machines and containers alongside WSL2 and Hyper-V on Windows' Quote from the VMware Workstation web page: I think I refused to believe that having WSL2 / HyperV enabled was the issue since it is supposed to be supported. I have used VMware Workstation since version 2 in 2000 and had never struggled with performance issues before. No, you can't do nested virtualization in this scenario but even more important is that I found the performance of virtual machines to be terrible with Linux virtual machines seeming to have the most performance impact. I love WSL2 and had it enabled on my 2021 Dell XPS 17' with an i9 and 64GB of RAM (so plenty of processing power) and had VMware Workstation installed as well. WSL2, Docker or plain vanilla VM running inside a VM). Probably best to go with option (2) especially if you want different VMs requiring nested virtualisation capability (e.g. (2) disable WSL2/Hyper-V on the host and have nested virtualisation on VMs (which also means you can have WSL2, Docker, etc inside the VMs).

(1) have WSL2 on the host and lose nested VM capability in Workstation VMs, or

Without Hyper-V enabled on the Window 10 host, the VMM is the regular ring 0 Intel VT-x (in vmware.log Monitor Mode: CPL0) and nested virtualisation works. But nested VMs capability (the 'Virtualized Intel VT-x/EPT o AMD-V/RVI is checked in the VM processor settings) will show the error message that you see. This is what allowed Hyper-V on the host to co-exist with running VMware Workstation VMs. With Hyper-V enabled on the Windows 10 host, the virtual machine monitor (VMM) will be using the Windows Hypervisor APIs (can see this in the vmware.log as Monitor Mode: ULM). I don't think nested virtualisation ever worked when Hyper-V/WSL2 was enabled on the Windows 10 20H2 host.

Vmware player wsl2