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Followup... this issue seems to only apply for gz compressed backups; when restoring a lzo compressed backup, VMs are just as responsive as when not restoring.

On a pve-4.4 server, hosted VMs stalls while restoring a gz compressed backup from a nfs connected storage. According to 'top', gzip uses 20-50 %CPU (Intel Xeon E3-1270 V5 3.6GHz 8 cores), so there should still be plenty of room for pve. The OS itself does not seem to be hogged in any way, but...