bluefirestorm is right.
I visit a session on last VMworld and a VMware SE explained that the vHW Version "matched" a hardcoded cpu feature set. The given CPU features are present to GuestOS and Apps. So if you stay at vHW8 or older and use a modern SkyLake based pCPU these CPU features are not visible in the GuestOS and you may get less performance if your OS and Apps can take advantage of the new cpu features. They present also a slide with all the improvments between the different vHW versions.
Regards,
Joerg