are performance impacted a lot if we setup proxmox backup in a vm? I'm thinking to extend the use of the backup server and be able to launch different vms on it. The vm of the backup server would be mounted on a zvol . Thoughts?
As usual: it depends.
Personally I prefer to put the PBS outside of the cluster: you may want to be able to use the backup system if the cluster is down! That said: my Homelab runs PBS both parallel on PVE and another instance in a Container on PVE (and somewhere else).
In my recognition the storage is more important. You need relatively high IOPS or your will get problems with timeouts because just reading the directory of chunks takes too long. (There may be millions of them!) A Raid6 on rotating rust is just a bad idea. Been there; done that. The official recommendation is to use SSD!
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