"Scale Display: Always + Auto resize VM with window" sounds like a
feature of the hypervisor. Which hypervisor are you using?
Usually to resize a VM dynamically it either uses;
(a) A custom Xorg driver in the guest (but you're not using Xorg); or
(b) Virtually hotplugging the virtual monitor with one of a new resolution.
Overall I'm not sure which software component is expected to be
responsible for this. It might help to take a closer look at 23.10 where
it worked and list the differences in the guest like kernel driver in
use, and Wayland vs Xorg.
** Package changed: xorg (Ubuntu) => ubuntu
** Changed in: ubuntu
Status: New => Incomplete
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https://bugs.launchpad.net/bugs/2068908
Title:
VM guest resolution is not saved anymore
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