I'm experiencing severe performance problems with SQL Server 2019 (any edition) when using Windows/integrated authentication but with machine accounts - NOT domain accounts. The simplest reproducible steps are:
Have 1 VM ("web") connecting to another ("sql").
Both VMs are on "WORKGROUP", not a Windows domain
Create an account "serviceaccount" on both machines, with the same password.
On "web", run the IIS application pool as "serviceaccount".
Create a login on "sql" for "serviceaccount" using "FROM WINDOWS"
When connecting to "sql" from the IIS application, use integrated security
It works, but is on average 3x slower than when using a SQL login or Windows Authentication with a domain service account.
When using Windows authentication with the machine accounts, I see this in the task manager:

Local Security Authority Process (LSASS.EXE) is taking up almost as much CPU as SQL. However, when I use domain accounts or SQL logins, LSASS is doing nothing, and SQL uses about double the CPU. Operations are on average 3X faster.
This problem only seems to affect SQL Server. I use the same service account to access a file share attached to the SQL VM using SMB, which doesn't cause LSASS to use any CPU and goes at normal speed.
Windows Defender, Firewall, and anything else that I could think of as being responsible for this are all turned off.
Appreciate any ideas!