You can install docker inside a KVM machine, if advisable depends on your intended setup, as you are adding some extra layer (KVM) between docker and your hardware. Head over to docs.docker.com for advise on installing docker.
It is sure not recomended for production, but some time ago I tested PVE & Docker on the same server. It co-existed very well, I do not remember having any problem with it.
The only drawback was two separate GUIs: one for PVE, the other for Docker (Portainer). If this could be integrated together to single common GUI, it would be for me the ultimate virtualization solution...
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