Comment 14 for bug 1788665

There is always a performance differential between bare metal & VMs. The actual amount varies depending on alot of different factors and meltdown/spectre have had an effect here - the actual perf hit depends on the CPU models & virtual hardware and more besides - ranging anywhere from 0% to 40% perf hit

The guest VM *does* know about the Spectre mitigation because it is being given the "ibrs" feature which is sufficient for guest OS to mitigate the problem. STIBP is only needed by the host. Exposing microcode version to the guest is not required as OS should only need to look at the features provided to determine if it can mitigate the flaws. The complaints about microcode version from spectre-meltdown-checker.sh are a bug in that script. The important parts are the "STATUS: NOT VULNERABLE" lines

If you disable Spectre protection in the Windows VM, then it is not protected from Spectre. The hypervisor protects itself, and exposes the CPU feature(s) that enable the guest to activate its own protection. The hypervisor won't protect the guest directly - it just gives it the tools needed to protect itself.