Are you running Workstation with Hyper-V as the upper level monitor, or the VMware hypervisor as CPL0?
Could the AMD updates have disabled or changed a setting in firmware that broke the hypervisor monitor (such as turning off virtualation features).
Theres really no such thing as “software virtualization” IMO unless you are running a CPU chip emulator. Everything else is a cooperation between hardware and the virtualization software - virtual machine code normally runs on the CPU until the hardware traps back to the monitor when the VM needs to execute privileged functions. And the hardware contains instructions that help out those monitors do their job more quickly.