Hello @Chris Har
As specified in https://learn.microsoft.com/en-us/windows-server/virtualization/hyper-v/deploy/deploying-graphics-devices-using-dda , DDA is compatible to share PCI devices with VMs but Microsoft provides no specifics into nested virtualization compatibility. Neither compatible or incompatible, but the absence of defined approach may seem that it has an unconsistent experience.
In theory, it should work, as long as the PCIe is passed through DDA, enabling DDA on the Virtual Machine should also pass the hardware to the nested virtual system.
Hope this helps with your query,
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