Q. Is there any documentation on the performance impact to turning on Hyper-V processor compatibility mode?
A. Processor Compatibility is useful in environments that consist of different generations of processors that would block Live Migration because of differences in supported instruction sets. Processor Compatibility hides many instruction sets bringing the different generations of processors down to a common set of instruction sets. The concern may be how the removal of certain instruction sets may impact the performance of the workloads. Microsoft has a few example in a site at https://technet.microsoft.com/en-us/library/hh831700.aspx which provides a few examples that show for certain workloads the enablement of Processor Compatibility could result in significant performance impact. Definitely worth reading.