Nested virt is a complex beast, even of the most "advanced" hypervisor (VMware). It will be hopefully a lot better in 2025 in Xen, but there's no magic: when you add such level of indirection, many things are wonky, while you need to stay secure and have decent performances, which is really really hard in nested.
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RE: Nested Virtualization for Linux VMs with AMD SVM enabled in BIOS fails - hangs at nested VM boot for DockerDesktop and/or libvirt
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RE: Beginner advice - coming from Debian
No, it won't. You need a XAPI enabled host. Vanilla xen uses libxl, which is far from being like XAPI.
I love Debian and we use it in our entire production, in VMs. Virt hosts are XCP-ng based and I never access the shell, because there's no reasons to do it, everything goes via XAPI. Don't treat your virt hosts as pets, with specific config: they should be XCP-ng out of the box
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RE: PCIe card removal and failure to boot from NVMe
And if you replug the card it works again, right?
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RE: PCIe card removal and failure to boot from NVMe
Are you sure it's cleared? I would suspect it's still the case. Note the Grub file is generated, so you really need to clear it from this command:
/opt/xensource/libexec/xen-cmdline --delete-dom0 xen-pciback.hide