Unfortunately I haven't been that lucky. I just updated to the latest beta release of macOS Sonoma and the issue is still present for me after the update - in fact nothing has changed. The VM still crashes within seconds of starting, and the same error about setugid not being allowed is displayed in the terminal after a log capture.

For context, I am now running beta build 23A5301h (as opposed to 23A5301g, which would suggest this wasn't a big update).