VirtualBox detects only less than half of the cores and designates ANY number of cores to be used by 'red' on a machine with a high number of cores

Question

I have been using Oracle VM VirtualBox for many years and even on systems with only two cores, I have always seen the 'green' light for 50% of the cores.

To my surprise, currently on a Linux machine with 80 cores, I only see 32 cores in VirtaulBox! But that is not all: Oracle VM also gives me a red flag for even very low number of cores: e.g. even 2 (out of 32) is considered 'bad'!

Information about the cloud machine I am using:

OS: Ubuntu 16.04.4 LTS (GNU/Linux 4.4.0-116-generic x86_64)
RAM: 218 GB
Architecture:          x86_64
CPU op-mode(s):        32-bit, 64-bit
Byte Order:            Little Endian
CPU(s):                80
On-line CPU(s) list:   0-79
Thread(s) per core:    1
Core(s) per socket:    1
Socket(s):             80
NUMA node(s):          1
Vendor ID:             GenuineIntel
CPU family:            6
Model:                 94
Model name:            Intel Core Processor (Skylake, IBRS)
Stepping:              3
CPU MHz:               2194.916
BogoMIPS:              4389.83
Virtualization:        VT-x
Hypervisor vendor:     KVM
Virtualization type:   full
L1d cache:             32K
L1i cache:             32K
L2 cache:              4096K
L3 cache:              16384K
NUMA node0 CPU(s):     0-79

What is happening and how can I fix this issue?