Essentials R2 licensing and having more than one VM

My understanding with Windows Server 2012 Essentials R2 is that the licensing has changed, so that we can install WS2012 R2 with only Hyper-V role on the host AND WS2012E R2 as a VM.
However, I just ran into someone who believes that this is the only VM that is allowed. IOW, you can't add a Win7 VM, even with a valid Win7 license.
That doesn't make sense to me, but I want to verify this before going down that path. Is there a limit on the number of VMs in this scenario?
-- Henri

Can you please provide a reference to that in the licensing?
I found this
licensing document.
I have always understood the Windows Server 2012 R2 Standard licensing to be 1 + 2, meaning that you could install it as the host OS with Hyper-V role and install it as the guest OS on 2 VMs. However, there is no limitation to how many other VMs you
can install as long as you have licenses for those OSes. So, if I have 5 Windows 7 licenses, I could have a total of 7 VMs (2x WS2012 R2 Std and 5x Windows 7) on a single physical server.
On page 13 it says:
"With Windows Server 2012 R2 Essentials, the product licensing terms have been expanded to enable you to run one operating system instance on the physical server for Hyper-V, plus a second Operating System Environment on that server in order to
run Essentials as a virtual machine."
I interpret that to mean that it's 1 + 1, meaning I can install it as the host OS with Hyper-V role and as the guest OS on 1 VM. But still have no limitation on how many other VMs, as long as they are all properly licensed. So, as I understand it, I
should be able to purchase 2x Windows 7 and 1x Windows 8 and setup 3 more VMs accordingly.
So to be clear, I believe that the licensing allows you to install WS2012E R2 both as the host OS (Hyper-V role only) and a guest OS on a VM. But, DOES NOT limit you from having any number of other VMs as long the OS installed on each VM is properly licensed.
Just like I can run multiple VMs on my Windows 8 machine, as long as each one is properly licensed.
If I'm wrong, please show me where that is stated in the license documentation.
As I said before, I want to make sure I understand this correctly before going down this path. Thanks for your help.
-- Henri

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