I keep a bad memory of how slow XP, 2000 and even NT4 were on late 90s machines.

Windows 9x was a strange beast, being a VM running on top of a DOS hypervisor, but it was mostly C and inline assembly and felt fast, even with 8MB of memory and a 75MHz processor. Windows 2000 was quite less efficient and would have taken eight times the memory and twice the processor speed to achieve the same responsiveness. Even more with XP.

Nowadays Windows, the mere operating system, feels slow even on computers as powerful as datacenters of the 90s. Twenty five years of abstraction layers, subsystems, processes and libraries adding up, and it's getting worse (W11 vs W10).

Find some hardware from the time and compare. Certainly common hardware from around the time of the initial release. It might not run as fast as you remember.

It definitely won't run as fast as a VM on a modern host with a much more powerful CPU, significantly faster IO (especially if the VM is hosted on an SSD).

Also, once you hit the point where the guest OS can't cache as much as it wants (as you've allocated a realistic amount of RAM from time) the host layer may be caching reads at least in the extra memory it has.

[though I do get the point: if it can be as fast as it was on old kit, why can't Win10/Win11 be faster on modern kit]