I tried using nested virtualization, too, a couple of weeks ago.
I was using a 3 node HCI CentOS 7.8 cluster and I got pretty far. Configuring KVM to work
with nested page tables isn't all that well documented but I got there, I even
installed some host extensions, that seem requried.
Even the actual nesting, that is a VM run inside a VM did work, the setup came to the
point where it ran the hosted engine on temporary local storage, before it's picked
up, fixed up to run on the Gluster storage and restarted there. But that process failed
eventually, evidently because the overlay network doesn't support nesting. Where the
initial hosted engine is using a local bridge with the (in this case virtual) host--and
that works--afterwards it's using the overlay network and that evidently doesn't.
It was only then when I ran across a very obscure message somewhere in this mailing list,
that oVirt on top of oVirt in fact does not work at all! Up to that point it just
wasn't "supported".
When a hypervisor producer speaks of nested virtualization support, I would understand it
to mean that you can run their product under their product, ideally also somebody
else's product. I've run ESX on VMware workstation and that was pretty cool.
In the case of oVirt from what I have gathered (and I'd love to be wrong), it is
supposed to only mean that you can run oVirt on top of KVM.
Not the other way around, nor in any other way most likely.
To me that looks much more like an internal Redhat development facility, than a product
feature.
Of course I mostly wish they'd find a way to make it work like it does on VMware.
But next on my wishlist would be an explicit description of what does and what doesn't
work.
This way it was almost a week of a me against the computer adventure where I lost.