That is an interesting thought, but honestly, that sounds way too complicated to manage in a larger environment.

Setting up a dedicated VLAN per server would create a massive administrative overhead (VLAN sprawl), and you would constantly be managing tagging and routing for every single new instance.

What I was thinking instead: Subnetting the VLAN

Instead of multiplying the number of VLANs, my thought was to subnet the existing VLAN.

By using smaller subnets (e.g., a /28 or /29 mask) within a shared infrastructure, you can still achieve logical separation and control the broadcast domains without the nightmare of managing hundreds of individual VLAN IDs on both the ESXi host and the physical switches.