FWIW, bumping the kernel on the host (and most likely on the L1 VMs too) should 
work.
The HWE kernel in Xenial is the same version (4.15) with the kernel used by 
Bionic (18.04), so this should fix the problem:
$ apt install linux-generic-hwe-16.04
$ reboot

BR,
Alex

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https://bugs.launchpad.net/bugs/1797332

Title:
  qemu nested virtualization is not working with Ubuntu16.04 + Intel CPU

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