Can you run other virtualization in KVM Proxmox 6.0

Nested virtualization isn't relevant during installation so there must be something in the VM configuration it doesn't like or there is a bug. Have you tried other Linux distributions of that era with the same settings? Are you sure the iso you are using is good?
 
I downloaded the ISO right from Proxmox website. What Linux dist. with Virtualization capability do you recommend to test?
 
Almost any Linux will have "virtualization capability", as that is a kernel feature since 2.6 days. It can be un-configured when the kernel is built but I don't think any popular distros do that.

Proxmox 3.4 is apparently based on Debian Wheezy so that would be the one to try. You can get Wheezy ISO's at https://www.debian.org/releases/wheezy/debian-installer/

Again, if the installation won't run you have something wrong that has nothing to do with Proxmox's KVM feature. I've installed Proxmox 5.4 in Virtualbox on a laptop which doesn't support nested virtualization at all. It installed fine and I could create containers but hw-accelerated VM's would give a "no kvm" error.
 
I downloaded the ISO right from Proxmox website. What Linux dist. with Virtualization capability do you recommend to test?
 
I have research searched the existing threads and could not figure out the resolution. Here is what I have so far in my non-working environment:
Debian GNU/Linux comes with ABSOLUTELY NO WARRANTY, to the extent
permitted by applicable law.
Last login: Fri Nov 15 15:12:53 2019 from 172.17.1.132
root@vpshost25:~# cat /sys/module/kvm_intel/parameters/nested
Y
root@vpshost25:~# more /etc/modprobe.d/kvm-intel.conf
options kvm-intel nested=Y
root@vpshost25:~# modprobe -r kvm_intel
root@vpshost25:~# modprobe kvm_intel
root@vpshost25:~# cat /sys/module/kvm_intel/parameters/nested
Y

This is following the existing document provided:
https://pve.proxmox.com/wiki/Nested_Virtualization#Enable_Nested_Hardware-assisted_Virtualization

I also tried changing multiple parameters for the VM setup but no luck. Any other suggestions from other members are much appreciated.
 
I tried even a Centos 6.9 iso and I am getting the same result: boots but will not continue installation and after flashing reboots. I beleive this is related to the parameters (default) for creating the VM.
 
After reinstalling Proxmox 6.04 without any updates this was resolved.

root@vpshost25:~# pveversion --verbose
proxmox-ve: 6.0-2 (running kernel: 5.0.15-1-pve)
pve-manager: 6.0-4 (running version: 6.0-4/2a719255)
pve-kernel-5.0: 6.0-5
pve-kernel-helper: 6.0-5
pve-kernel-5.0.15-1-pve: 5.0.15-1
ceph-fuse: 12.2.11+dfsg1-2.1
corosync: 3.0.2-pve2
criu: 3.11-3
glusterfs-client: 5.5-3
ksm-control-daemon: 1.3-1
libjs-extjs: 6.0.1-10
libknet1: 1.10-pve1
libpve-access-control: 6.0-2
libpve-apiclient-perl: 3.0-2
libpve-common-perl: 6.0-2
libpve-guest-common-perl: 3.0-1
libpve-http-server-perl: 3.0-2
libpve-storage-perl: 6.0-5
libqb0: 1.0.5-1
lvm2: 2.03.02-pve3
lxc-pve: 3.1.0-61
lxcfs: 3.0.3-pve60
novnc-pve: 1.0.0-60
proxmox-mini-journalreader: 1.1-1
proxmox-widget-toolkit: 2.0-5
pve-cluster: 6.0-4
pve-container: 3.0-3
pve-docs: 6.0-4
pve-edk2-firmware: 2.20190614-1
pve-firewall: 4.0-5
pve-firmware: 3.0-2
pve-ha-manager: 3.0-2
pve-i18n: 2.0-2
pve-qemu-kvm: 4.0.0-3
pve-xtermjs: 3.13.2-1
qemu-server: 6.0-5
smartmontools: 7.0-pve2
spiceterm: 3.1-1
vncterm: 1.6-1
zfsutils-linux: 0.8.1-pve1
root@vpshost25:~#

I am suspecting the problem was a result of the update. For now I will not update but one of the issues will be not having the most recent version of LXC to run Centos 8.0.

Any suggestions???