I decided to raise the default VM compatibility to version 19 on all clusters. Instead, on a cluster level, I decided to configure the compatibility level on the virtual data center level.
# Set data center VM compatibility level
$datacenter = Get-Datacenter
$spec = New-Object Vmware.vim.DatacenterConfigSpec
$spec.DefaultHardwareVersionKey = "vmx-19"
$datacenter.ExtensionData.ReconfigureDatacenter_Task($spec,$true)
For the data center-level config to take effect, I needed to clear the cluster-level settings.
# Clear the cluster level settings
$cluster = Get-Cluster
$spec_cluster = New-Object VMware.Vim.ComputeResourceConfigSpec
$spec_cluster.DefaultHardwareVersionKey = ""
$spec_cluster.MaximumHardwareVersionKey = ""
$cluster.ExtensionData.ReconfigureComputeResource_Task($spec_cluster,$true)