https://techdocs.broadcom.com/us/en/vmware-cis/vsphere/vsphere/8-0/change-the-evc-mode-for-a-cluster.html
Documentation says that you can raise the EVC mode and the running virtual machine can remain powered on. New EVC mode features will not be available to the VMs until they are powered off and powered back on again.
Never done this in production so I did this test in my lab and I raised the EVC mode from Ivy Bridge to a newer mode while the test machine remained on. The other way around is the tricky part, if you lower the EVC mode you have to power off the VMs before.
Since you said that you have 700 VMs in the cluster you can plan phased power cycles.
Check the link above there's a tip where you can configure the VM to power cycle when its guest OS is rebooted - so maybe you can do that when the patch window/maintenance is scheduled.