Do attempts without Windows as the first step count e.g running Windows in QEMU on Wine on Linux?
Also, depending on which version of WSL you used, you might be breaking your own rule with WSL on VMs since WSL2 uses Hyper-V. You might also be breaking it again with QEMU.
What actually counts as "VM software"? Are you defining it as a hypervisor, or does, for instance, emulating Linux on ARM in an emulator of a RISC V system in an emulator of a PowerPC system break the rule. In addition, do you mean consecutive VM software steps, or could I for instance emulate an ARM CPU that supports hypervisors and run a VM software in there?
Have you tried SSH-ing into the system when it's in the bad state to see if you can diagnose the problem? You might be able to see if any displays are being detected at all in the problematic state. Part of me wonders, though is not certain, if the switch is somehow providing an inconsistent display name that confuses the system, though this is just a hunch - I have no idea what I'm talking about, to be frank.
Also, try switching TTYs and seeing if those show up.