Would the CCR2004-1G-2XS-PCIe work in 1U server like HPE DL360?

The 18mm width should not be an issue if you have the full size slot available in your riser card.
Check out around 8:40 in this video https://www.youtube.com/watch?v=wDcuGs86VsU

But in any case, measure it first to make sure before ordering

Also check the length. Different mobos have different obstacles along the path from the back of the case to the front. If your vendor is really on the ball, they’ll document “up to full-height half-length PCIe” or similar.

I wonder about latency.That should be the downside since it passes traffic via cpu not asic.

But genius idea, i can shuck one of these in a edge server and use it as router for the many vm s running on that edge device.

I can fit this into any of my node servers and all of my 1U servers except SuperMicro 6017 (PCIe port is for proprietary cards)