The short answer: no to scenario 1, and scenario 2 is not applicable or relevant.
When VMware Fusion is released for Apple Silicon Macs, the expectation is that it will initially allow virtualisation of ARM-based operating systems. For example, this would allow running ARM-based Linux variants, or macOS Big Sur in virtualisation on an Apple Silicon Mac. This will not extend to running older macOS versions (macOS Catalina 10.15 or earlier), since they are Intel operating systems.
To run PowerPC applications under Rosetta, you would need to be able to run the Intel versions of Mac OS X 10.6 Snow Leopard Server or Mac OS X 10.5 Leopard Server in a VM. Those will not work under the expected initial release of VMware Fusion for Apple Silicon Macs. Therefore with the initial release of VMware Fusion for Apple Silicon Macs, there will not be any way to run old PowerPC-only applications like Eudora and Palm Desktop.
The best way this could be achieved would be if someone released a product which went beyond virtualisation and also emulated an Intel processor. This would be similar in concept to products like Virtual PC (from Connectix, later bought by Microsoft) which emulated an Intel PC down to the processor instructions, and allowed running DOS or Windows on a PowerPC Mac.
Rosetta 2 has nothing to do with this: it provides code translation to run Intel processes on an Apple Silicon Mac under the host macOS. It does not provide a way to run an entire Intel operating system in a virtual machine, and cannot be used to assist virtual machine software to run Intel code inside a virtual machine.
In addition, the question in your thread title suggests that you misunderstand what Rosetta does. Rosetta is not a "virtual machine". It is a code translator. Rosetta 1 decodes sequences of PowerPC instructions and generates an equivalent sequence of Intel instructions, which are then executed by the Intel processor. Rosetta 2 decodes Intel instructions and produces equivalent ARM instructions to be executed by the processor. In each case the translated code is running directly on the host OS. (There is a minor difference in the way Rosetta 1 and 2 operate: Rosetta 1 did code translation on the fly with a small in-memory buffer, Rosetta 2 does code translation in bulk on application launch, with the translated code cached to disk, so execution is faster at the expense of disk space.)
You don't need a virtual machine inside a virtual machine to run Snow Leopard (or Rosetta 1) on an Apple Silicon Mac. You need a single virtual machine which is capable of emulating an Intel Mac including the Intel processor.
