A radio relay multi-hop transmission using Multi-Input Multi-Output (MIMO) is a promising technique to construct indoor wireless communication systems. To improve power efficiency at the power amplifier on the transmitter side, this paper considers MIMO constant envelope modulation (CEM) transceiver. On the other hand, the resolution of A/D converter (ADC) affects hardware complexity on MIMO receiver circuits. Although analog hardware complexity on MIMO receiver circuits can be reduced by decreasing the resolution of ADC, it causes severe ADC nonlinearity which affects achievable performance, i.e., there a trade-off between hardware complexity and non-linearity on ADC circuits for MIMO receiver. The objective of this paper is to investigate the influence of ADC nonlinearity on achievable performance in MIMO differential encoded Gaussian minimum shift keying (D-GMSK) systems using a reduced-state modified maximum sequence estimation (MLSE) equalization. In the MLSE equalization for D-GMSK systems, the influence of ADC nonlinearity is mitigated by approximating the received signal in presence of quantization error. Computer simulation results show that the MLSE equalization scheme approximating the influence of ADC nonlinearity improves BER performance of MIMO and SISO D-GMSK systems using a low resolution ADC compared to cases without using the above approximation in multi-path Rayleigh fading conditions.