I was told that XP is not optimized for virtualization which makes a lot of sense considering its age
Yes, it's not optimized, yet the fastest of the mentioned ones due to its old age, smaller code base, smaller requirements etc. With respect to "best performer", it is the fastest - as is DOS. It boots up in under a second .. but what can you do with it nowadays? Same is with XP - also regarding the ongoing increase in attack surface. Do not use unsupported OSes and also do not omit patching supported OSes ...
Windows 10 is the working fine as
@fireon already stated, yet it has some drawbacks:
Continous Windows 10 updates (the big ones like anniversary etc.) require at least 2 GB of RAM to run. This is huge for a small VM that does e.g. some simple task. You can pull it down to approx. 768 MB for just running, yet you have to increase the RAM to update. XP on the other hand is much "smaller" and runs at about 192 MB smoothly. If you only want to run one specific program, e.g. a VPN client - Windows in general is a lousy optimized OS for that purpose. Best is a small Linux, e.g. Alpine Linux with 32 MB of RAM and max. 64 MB space.
On the other hand, you always have the licensing issue with desktop operating system inside a virtualized environment. 2012r2 with datacenter edition is much better there. The server can also be stripped down better to bare minimum and even without a GUI. Yet not all programs run fine on a server class windows system.