They plainly state that software with AVX, AVX256, AVX512, virtualization, and other nebulous instructions simply won't compile using Rosetta 2.
They seem to be attempting to avoid newer, patented instruction sets (Intel issued a strongly-worded statement about companies that attempt to use their ISA that seemed aimed squarely at Apple), but that means that SSE3+ (and maybe SSE2) are also avoided which could mean a lot more software doesn't work then they'd like to admit.
For x86-64, SSE2 came with the original x86-64 release in 1999/2000 (according to Wikipedia, it was announced in 1999 and the full specification became available in August 2000), so if patents are limited to 20 years, it's already out of patent.
They seem to be attempting to avoid newer, patented instruction sets (Intel issued a strongly-worded statement about companies that attempt to use their ISA that seemed aimed squarely at Apple), but that means that SSE3+ (and maybe SSE2) are also avoided which could mean a lot more software doesn't work then they'd like to admit.