Any OS running in a virtual machine will be slower than running it natively. Your setup would be quite (unbearably!) slow especially on an old computer!!!!!
Depends on what you're doing, IMO. The industry has done a lot to improve the performance of VMs. If it's something I/O intensive that has to go down through the virtualization layer and get executed by the host operating system, then there's some definite overhead. For other things that are mostly computation or just make syscalls that don't need to cross the virtualization barrier, there's hardly any penalty at all.
Another way of looking at it is sort of like the opposite of emulation. With emulation, things like I/O tend to run at native speed, since they're implemented by native code in the kernel, but pure computation tends to have a lot of overhead.
At my job, we use a mix of VMs and containers, both with Linux as the host OS. Containers are definitely faster, but it's not like VMs are cripplingly slow.
I’m curious, are there any virtual machines that boot from bios, bypassing a host OS, into which win 11 could be installed?
I’ve not used a vm ..
While I think it's not quite what you're asking, I'd just like to point out that there are multiple ways to run VMs. One option is to use a general purpose OS, like Linux or Windows, as the host. Another is to run a thin "hypervisor" layer, like what VMWare sells.
At my job, we formerly used VMWare (vSphere), although I wasn't the admin and don't know a whole lot about it. These days, we use Linux as the host OS, either via general purpose distro (Ubuntu or OpenSUSE) on our desktops or via Proxmox running on servers. Again, I'm not an admin of the Proxmox stuff, but I gather it's sort of like a distro that's specialized for deploying Linux as a hypervisor.