The Software Assurance (SA) benefit "unlimited virtualization" allows you to run an unlimited number of virtual machines (VMs) with SQL Server Enterprise on a licensed host, as long as all physical cores on the host are licensed with SQL Server Enterprise Edition and active Software Assurance. This is applicable for on-premises deployments.
However, when it comes to Azure Arc-enabled SQL Server, the licensing model is slightly different. Azure Arc allows you to use the Azure Hybrid Benefit (AHB) to save on licensing costs. With the AHB, you can use your on-premises SQL Server licenses with Software Assurance to run SQL Server on Azure Virtual Machines or Azure Arc-enabled SQL Server.
To utilize the Azure Hybrid Benefit, you'll need to license the virtual cores in the Azure Arc-enabled SQL Server VMs. The minimum requirement is to license at least four virtual cores per VM. Note that this is separate from the unlimited virtualization benefit for on-premises deployments.