Some results from a very quick test using Hyper-V on a Windows 10 v21H1 x64 host w/ VBS enabled. All testing was performed in a Generation 2 VM with a fresh Windows 10 v21H1 x64 installation:
So to summarise, it clearly is possible under Hyper-V to use both VBS enabled VMs and nested virtualisation (inc. simultaneously), including on hosts which themselves have VBS enabled. It being technically possible, the next question is does Microsoft expose the necessary public APIs for 3rd-parties to leverage these configurations?
Is anyone from VMware able to comment if such support is on the development roadmap and if there are any major blockers to adding it?