Is there actually a way to use nested virtualization on the M2 or M3 yet? As far as I can tell both Parallels and VMWare are still saying they don't have that feature.
No, it needs hardware support for that. It needs another level of virtualized MMU, which Apple didn’t build in. That might come with the M4 generation only.
> will cause the CPU to pause the guest hypervisor, and let the host hypervisor running at EL2 decide whether and how to proceed. That is a big part in enabling nested virtualisation. There are other details, for example related to memory and interrupt management.
And they don’t elaborate on whether these "further details" were implemented or not; I would guess they’re not implemented, or else Apple would have mentioned it at a WWDC workshop. I might be wrong here though.