Yup, that totally makes sense and thanks again for the clarification. This means that there is literally no way of getting around this problem due to the hard coded restrictions unless VMware would decide to put back in the compatibility in ESX 6.7 for older CPU's. Still feels unjustified why they dumped the older CPU's and leaving tons of labs without much of a choice but HW upgrade. Of course I would totally agree that nobody should be running production workload on unsupported configurations (I suppose many people do that too) but that's a whole different story anyway.
So let's hope that we will see a revised ESXi 6.7 release with less restrictions. In the meantime I'll definitely would need to look for new motherboards, CPU's and RAM especially since nested virtualization anyway wouldn't have been ideal solution even if it worked.
Oh dear... here we go again on another lab building adventure