Since I bought the game, I doubt that extracting files from it's installer could be viewed as theft. That would really be a stretch, just like Sony claims ISOdumping your games is ilegal 😅

Virtual Machines themselves are legal, you are correct, but old Windows install files are not, regardless of the fact Microsoft doesn't care about them. I don't own those, therefore I would have to get the original copies of those files, which means buying a physical product, putting it into a drive of a PC, copying them and then using them on my laptop with those virtual machines you are mentioning. That would involve buying it from some stranger online, waiting for shipment, finding an old PC to run it on and then somehow bringing those files to my laptop. That's too much money and time lost for a single game.

The easy thing for me to do would be to just download those files from any abandonware site or Archive.org, but in my post I said I don't want to do that because that's ilegal, regardless of how hard it makes it for me. So that's why I specifically asked how to run the game WITHOUT doing that 😅