What are you trying to ask?
"When should I not virtualize" is an enormously open-ended question with a huge breadth of possible answers. There's no possible way for an answer (or set of answers) to encompass all of them - it would degrade quickly into a forum-style "But that works for me" / "that doesn't work in environments where
As was pointed out in the comments, this is also not something that can be answered generically - the hypervisor(s) you're using and possibly even the guest OS will play important roles in the answer.
Bottom line for me, this question as written runs afoul of this chunk of our FAQ:
You should only ask practical, answerable questions based on actual
problems that you face. Chatty, open-ended questions diminish the
usefulness of our site and push other questions off the front page.
Your questions should be reasonably scoped. If you can imagine an
entire book that answers your question, you’re asking too much.
The only way I can see to salvage it would be to reword the question as a specific application of virtualization technology (hypervisor, underlying server/storage/network subsystems) and intended workload.
Even that would be bordering on "too localized" -- it's a performance question that can really only be answered by benchmarking and deciding if your system's performance as a VM would be adequate. Every environment will generate its own rules on what can/can't virtualize based on in-house knowledge of the workloads and capability of the virtualization platform.