When Hyper-V is enabled on the Windows host (such is the result of installing Docker on a Windows host), the Microsoft Hypervisor API is used instead of the ring 0 VMM. The minimum CPU requirement becomes Sandy Bridge as well.

https://docs.vmware.com/en/VMware-Workstation-Pro/16.0/com.vmware.ws.using.doc/GUID-177F1E77-BFFD-48...

X5650 CPU is from Westmere generation (one behind Sandy Bridge). The XSAVE instruction was introduced in the Sandy Bridge generation of Intel CPUs.

After removing Docker, the Hyper-V components are likely still active. Refer to this KB on steps to remove it.
https://kb.vmware.com/s/article/2146361