What is a drawback of specifying a limit for a VM's resource usage?

Specifying a limit for a virtual machine's resource usage can indeed result in wasted idle resources. When a limit is set, the virtual machine is restricted to using only a certain amount of a resource—even if there are additional resources available on the host. This means that if the VM does not utilize its full allocation, those unused resources cannot be leveraged by the VM or any other VMs on the host at that moment. Consequently, this can lead to a situation where there is an excess capacity that goes unused, thus not taking full advantage of the underlying infrastructure's capabilities.

This is particularly significant in environments where resource allocation needs to be optimized for performance and efficiency. By capping resource usage, you may inadvertently create scenarios where VMs have access to ample resources but cannot utilize them fully due to imposed limits, leading to potential underperformance and inefficient resource management.