If you want to use nested virtualization inside your instances you should try the parameter
libvirt_cpu_mode=host-passthrough in the configuration of your compute nodes.
libvirt_cpu_mode=host-model I saw the required CPU flag
svm inside the instances. But loading the processor specific KVM module failed with the following messages in the kernel ring buffer.
[ 664.051540] has_svm: can't execute cpuid_8000000a [ 664.051553] kvm: no hardware support
After changing the parameter
host-passthrough it was possible to load the processor specific KVM module and to use KVM inside the instances.
[ 1.585709] systemd: Detected virtualization 'kvm'. [ 5.856891] kvm: Nested Virtualization enabled [ 5.856891] kvm: Nested Paging enabled