Intensive testing of KVM was done with Eoan, so I'm confident that KVM works in 
general (tried and used it by myself multiple times).
z/VM should be out of scope in this case - in addition KVM on top of z/VM is 
not supported - and nested virtualization is not supported at all on s390x (KVM 
on KVM or KVM on z/VM).
Right, KVM is compiled in the kernel, since about cosmic days.
This must have todo with the combination KVM running in container, hence I'm 
more thinking about LXD (profile) and apparmor.
Interesting to know is also if this is the same on amd64 or not (or other 
non-s390x systems).

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https://bugs.launchpad.net/bugs/1850530

Title:
  qemu-system-s390x permission denied in container on Eoan

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