Great illustration! Everything looks good as far as the wiring and ports.
If you turn off the WiFi on the VM Hub, that does not mean that the device will be in "modem mode". It will still be operating as a wired DHCP and NAT router.......unless......there is a separate setting on the VM Hub that would allow it to function as only as a modem, and not a router.
If the VM Hub is acting as a router, then you have APAE1 also acting as a router......unless......APAE1 will be set up in Bridge Mode. If it is not, you will have two devices acting as routers when you only want to have one device acting as a router on a network. With two routers.....the VM Hub and APAE1......,you will have what is known as a Double NAT error displayed when you set up APAE1.
Fortunately, Apple's set up software will usually detect this and automatically configure APAE1 in Bridge Mode, even though you may not be aware of this.
Double NAT reduces the efficiency on a network and can create some issues since you will have two devices trying to assign IP addresses to network clients instead of only one, which would be the standard set up for a network.
If the VM Hub cannot be configured to act as only a simple modem, and it must remain configured as a router, then both APAE1 and APAE2 will need to configured in Bridge Mode, which Apple calls "Off (Bridge Mode)", just to try to confuse users.
