You have to differentiate between
(1) the account that is used to run Veeam itself
(2) the account that is used for connection to VMware and/or Hyper-V
(3) the Account for application aware guest processing
My recommendation to use local accounts was for (1) and (2)
For application aware processing, local accounts "becomes a nightmare" as Timothy said - I would use domain accounts for this.
You do not need a real domain admin for this, but almost... e.g. application aware handling of domain controllers do not work without a domain admin, as there is no local admin on a domain controller. https://helpcenter.veeam.com/docs/backu ... tml?ver=95
There is also a restriction if you have no network connection to the guest OS, and you do application aware processing with tunneling through the VMware Tools (UAC problems if you do not use a well-known account, see veeam-backup-replication-f2/backup-failing-due-to-uac-t13018-15.html