Your CPU is simply old. Your Xeon CPU is basically equivalent of Intel Core 3000 series (ivy bridge).
While being server-grade, it is of course bit more powerful, on other side, it's target never was game related workloads so it might suffer there.
Additionally, old generation of Intel CPUs were suffering from CPU vulnerabilities (Spectre/Meltdown/L1TF/Retbleed...). Mitigations of these slowed some CPUs to crawl (depending on workload, the performance decrease was over 70%) - at least on Linux, but I imagine the same impact was on Windows as well. On linux these mitigations can be easily disabled, returning the CPUs to their former glory, but being the Linux guy, I am not sure if this can be done on Windows or how easy it is. The improvements you describe (better performance with lower cores and disabled HT) matches the post-mitigations symptoms.
Which brings us to OS. Windows 10 and 11 does not officially support your CPU. While it might work, some features and capabilities might be missing. The Windows server edition on other hand don't support running games (so while they might work, game optimizations present on desktop windows might be missing on server editions).
Moving forward, if you are somewhat familiar with Linux (and only if you are familiar), I would recommend your luck there as even modern Linux still supports your CPU and you can control the mitigations and PoE runs very well via Proton.
Can confirm that performance on mine old ivy bridge CPU is not affected by the mitigations in this particular case, sadly.
Yeah, ive tryed to disable as many mitigations a i can so far, and got no difference.
i had the same problems with new i7 (at the time) and 3070 ti graphics card. Was using the standalone client. Came to the idea to use Exitlag and problems were gone. Now moved to steam from standalone client and problems are also gone (without have to use exitlag). Probably some netcode / routing issues from my provider to servers i guess.... (living in germany)
That CPU is 10 years old. 8C/16T means next to nothing because the architecture changes/changed over the years. If you can afford an upgrade and you want to stay on Intel, I can recommend the i5-12400. I was using it in 4k with a screen spamming build and it played just fine. It was around €130 when I bought it, no idea what your situation is. I didn't read through all the pages, sorry if I missed something.
i had the same problems with new i7 (at the time) and 3070 ti graphics card. Was using the standalone client. Came to the idea to use Exitlag and problems were gone. Now moved to steam from standalone client and problems are also gone (without have to use exitlag). Probably some netcode / routing issues from my provider to servers i guess.... (living in germany)
Its not connection trouble, stutters occurs even in menu, before logging in
