Yes, if you casually put multiple instances on the same machine, you can get into trouble.
But please keep in mind that there is a lot of "it depends" here. We don't know what sort of workload you have in mind. At my client we have a server with four instances on it. I don't recall what memory configuration we have set up, or if we have set something up. But these are all dev/test instances for the same system. On the production server, there is only one single instance.
I think that in many cases I would prefer to have two production instances on two different VM than as two instances on the same VM. But then again, if the VM host is over-provisioned, this is not really different from having multiple instances on the same VM.