Hi Salim,
In the portal, please navigate to your VM -- Overview blade, and confirm that it shows Security type: Standard, as seen in screenshot below:
I just tested creating D4s_v3 with "[smalldisk] Windows Server 2022 Datacenter: Azure Edition - x64 Gen2" image and was able to install Hyper-V inside of the VM without error.
Please click Accept Answer and upvote if the above was useful.
Thanks.
-TP