VM with less CPU reservation configured is not allowed to Power on due to strict reservation in VM hardware version 14 or later.
Environment
VCenter 8.x
VM Hardware (H/W) version : 14 or later
Cause
VM H/W version 13 or lower- in this version, which is relaxed compatibility checks for reservation, so this version allow VM to boot with less than 100% CPU and Memory reservation when Latency sensitivity configured "High".
VM H/W version 14 or Higher - in this version we have very strict enforcement of resource settings. So, the VM with less reservation treated as under provisioned and will not allow to boot \ Power ON when Latency sensitivity configured "High". You observe error "Invalid CPU reservation for the latency-sensitive VM. Need full CPU reservation:xxxMHz"
Resolution
We need to configure full CPU and Memory reservation to allow VM to Power ON.
Workaround:
In VM settings, navigate to "VM Options"
Click "Edit Configuration" under "Configuration Parameter"
Add below parameter and it's value
latency.enforceCpuMin = FALSE
Note: This configuration might lead to reduced performance
4. Power ON the VM, this should allow the VM less reservation to boot.