I thought I had found a workaround - but I was wrong.
It worked for a while but after I enabled the Shared VM feature the fix no longer works.
To make the behaviour even more strange I now observed that on my Xeon host I can no longer power on poweredoff VMs but I can resume VMs.
Which Xeon processor do you have?
Intel Xeon W3565 3.2 Ghz
12 GB RAM
WS 12.01 was completely satisfied with this CPU
I don't think it is a Xeon issue but any processor before Westmere would not have the "unrestricted guest" VMX feature; if the Wikipedia article is taken at face value.
On a Penryn Core 2 Duo 9700 (pre-Westmere), aside from not having EPT (which unrestricted guest requires), it also can't power up the VM.
On i7-620M, i5-580M (both Arrandale), VMs were powered using Fusion 2017 Tech Preview on macOS and Workstation Pro 2017 Tech Preview on Linux, respectively.
The Intel ARK site does not have an option in the Advanced Search to look for processors "Unrestricted Guest" feature.
But from what I can see in the Intel Developer Guide, the Unrestricted Guest feature is identified by MSR 485 bit 5 set to 1.
2017-07-25T04:58:26.927+02:00| vmx| I125: Common: MSR 0x485 = 0x401c5
So in this case, the bit 5 is 0 so the Unrestricted Guest feature is not available.
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It would be good to know from an official VMware statement whether indeed support for the older Intel processors that does not have the unrestricted guest VMX feature would be dropped in the next major release of Workstation Pro/Player/Fusion.