Hi Ziggy,
Your observation is correct. Windows Hello itself isn’t what directly “turns on” VT‑x/EPT restrictions. Instead, when you re-enable Windows Hello after disabling Device Guard and Credential Guard, the system on your Surface Pro 8 appears to be reactivating components of virtualization‐based security (VBS) that conflict with VMware’s use of VT‑x/EPT.
Windows Hello (facial recognition and PIN) is managed independently through the TPM and Windows Hello infrastructure, not by Device Guard or Credential Guard. However, on some platforms the reconfiguration of Windows Hello can inadvertently cause certain VBS features to reinitialize. This reactivation is what prevents VMware from accessing VT‑x/EPT even though you initially disabled Device Guard and Credential Guard.
At this time the supported configuration for running VMware Workstation with nested virtualization requires that VBS (including Device Guard/Credential Guard) remain turned off. If maintaining Windows Hello with facial recognition and PIN is critical to your workflow, one solution is to switch to Hyper‑V instead of VMware Workstation. Hyper‑V is designed to operate with VBS enabled and will allow you to use Windows Hello normally while still supporting virtualization.