It's less about it being not appropriate for perf tests and more so
that you can't directly compare bare metal to a virtual instance. Load
testing virts against virts is fine as long as your factor the drift
in shared resourcing.

As for LABS production use I'm curious about would it would take to
make this work in the future. LABS is a low cost env to spin up
hardware that is easily discarded after. To me this is critical in
supporting our engineers teams experiment with low cost.

I know that isn't something that we do currently but either we need to
get production into a state where its simpler to spin up new
production instances/products/extensions/etc or we allow LABS to take
some small production traffic for experiments.