"Remote Code Execution" means the attacker can Execute Code Remotely, right? I guess you could classify the virtual machine as a (virtually) separate machine from the physical one, so that it's not a RCE on the machine you actually want to attack, but it's clearly executing code on some machine that the remote attacker isn't supposed to be able to execute code on.
This is simply not true in a plurality of cases (eg, it implies that applications running under qemu are incapable of having RCE vulnerabilities) and frankly sounds like a distinction that was made up to avoid admitting that script tags are RCE bugs in web browsers.