I'm not sure if Windows forces you to reboot after disabling Device Guard and Memory Integrity, but you also have to reboot for those changes to take effect.
Yes, windows 11 did prompt for a reboot after disabling Memory Integrity, but it did not for Device Guard.
With the first (failed) attempt to get VMs working, I did reboot after disabling both of them, thus the VMs failing was not due to not rebooting.
Thanks
