But aren't Mx based macs supposed to be the fastest computers you can get? Why wouldn't they be able to run more than 2 VMs?

I can run a ton of Windows VMs at the same time, wouldn't Windows be a comparable resource hog to MacOS?

Apple M2 CPUs can have up to 192GB of RAM. If we look at the Mac Neo that has only 8GB of RAM, then an M2 host should be able to run at least 20 VMs before memory gets scarce.

There's no good reason Apple limits to 2 VMs except for greed, which they are well known for.