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In terms of Graviton3 which utilizes the Architecture ARMv8.4-a [1] from the 8.3 version onward nested virtualization is supported. This is only the case for the Bare Metal instances, as you mentioned.
From a hardware and architecture perspective this is supported. It would come down to the software that you are using to perform this.
References: [1] https://developer.arm.com/documentation/102142/0100/Nested-virtualization [2] https://phoenixnap.com/kb/ubuntu-install-kvm [3] https://ubuntu.com/blog/kvm-hyphervisor
Thank you for your answer.
Does AWS provide any Linux-based host image which can be used as a hypervisor for nested virtualization? Currently RedHat[1] and OpenSuse doesn't enable such feature.
References: [1] https://access.redhat.com/documentation/fr-fr/red_hat_enterprise_linux/9/html/configuring_and_managing_virtualization/how-virtualization-on-arm-64-differs-from-amd64-and-intel64_feature-support-and-limitations-in-rhel-9-virtualization [2] https://en.opensuse.org/Arm_architecture_support#ARMv8.3/8.4_-NV(Nested_Virtualization)