It was apparently a hassle in the past, but the bypasses are basically built in to the tools now. Nvidia is calling the blocking behavior a "bug", but the have no intention to act on it.
It is not a bug. The windows driver contains KVM signatures, aswell as signatures for Hyper V extensions, and if they are enabled the driver fails to run. However if you modify the signatures in KVM and in HyperV devices, everything works fine. This is clear cut NVIDIA malfesence.
That's why I put it in quotes. It's pretty clear the original intent was to push people to get Quattro cards for using in VMs. My impression is that they gave up on the idea for normal users and are trying to play it off while suggesting they aren't going to fuck with people any further.
This should be documented and spread more widely. Nvidia seems to use the same tactics as Intel in market segregation and also some semi-related bullying tactics.