This is working for me and several others, we need to find what is
different in your case.

Is that "root@juju-5e1208-basic-yakkety-newton-7" system a bare metal - I'm 
wondering if we are talking about 2nd or 3rd level virtualization.
What does "systemd-detect-virt" report on there?

Also you should still have:
/etc/modprobe.d/qemu-system-x86.conf
This is setting nested to 1 by default in Yakkety as you had in the past.

I wonder about the missing sysfs path
"/sys/module/kvm_intel/parameters/nested" could you check if the module
is still having that argument. You could run "modinfo kvm_intel".

I checked to be sure, but I found the sysfs path to exist and the module to 
hold the option in X/Y/Z.
What are the kernel versions you are running on in Host and first Guest?


** Changed in: libvirt (Ubuntu)
       Status: New => Incomplete

** Changed in: libvirt (Ubuntu)
     Assignee: (unassigned) => Hua Zhang (zhhuabj)

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https://bugs.launchpad.net/bugs/1683670

Title:
  2nd/3rd level virt on Yakkety and later

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