I did it under Monterey with VMWare Fusion 13.5.1 and Sonoma. Works OK, and if you enable ParaVirtualization in the VM you will get 3D accelerated graphics in the VM.
EDIT: Ventural worked as well. Haven't tried Sequoia. The main benefit you'd have with this setup is not having to reboot between versions of the OS. If you do it with an SSD, you'll get better performance as usual, but with this iMac's Fusion drive, performance was still very usable. Another note is, even with ParaVritualzation enabled, some graphics related stuff don't run in a VM, as they don't work with OCLP either. So in both cases best to keep a supported OS around for those tasks.