It is absolutely not a bug, Disassembly of NVIDIA drivers shows that its looking for specific KVM signatures, and if you modify those signatures, magically it starts working again...
Removing KVM signature is now the standard solution. But there's still a working driver patch to remove the virtualization check, it's available at here.
* sk1080/nvidia-kvm-patcher: Fixes "Bug" in Nvidia Driver preventing "Unsupported Configurations" from being used on KVM
* sk1080/nvidia-kvm-patcher: Fixes "Bug" in Nvidia Driver preventing "Unsupported Configurations" from being used on KVM
https://github.com/sk1080/nvidia-kvm-patcher