If the VM is powered off, you can normally downgrade the hardware version just by changing the virtualHW.version config in the vmx file. to a lower number and it will work fine.
Occasionally the hardware version upgrade changed the attached devices, and then you might be missing something after you downgrade, so back up the vmx file and/or the full VM if it's critical. But we don't generally plug/unplug virtual devices on upgrades, so you should be able to get Workstation 16 running the VM again if that's what you want.
As for why Workstation 16 doesn't have the key-repeat issues for you I couldn't say without knowing what it was... By "host" I don't necessarily mean your Host OS, it could be a Workstation product issue causing the stall, it's just outside the Guest itself, and outside the console keyboard handling.
Possibly Workstation 16 is more performant for your particular configuration/workload, or we might be tweaking something on your Host OS differently.
The reason they hit is usually that guest time stalls for a second, and when we try to catch it up the guest mistakenly thinks the key is held down longer than it should be (due to the time warp). We used to have more control over this, but most modern Linux distros switched to running the key-repeat themselves in software rather than allowing the virtual device to control it.