Come to think of it, I'm pretty sure that RPi does not have virtualization hardware. I say this because this hardware is usually configured in BIOS and to my knowledge, the RPi doesn't have a way to configure its BIOS (or whatever its called in RPi speak)
So, what you're trying to do probably can't be done.
Now that said, I am running ubuntu and a VM under it on an x86 machine (that has virtualization hardware) with only 3GB RAM. In the VM I am running Home Assistant. Running directly under Ubuntu is a mosquitto broker. Perfect use for an old PC.
Basically, what you're doing is pretty cool, but of no real use other that learning how to jump through a whole lot of loops.
Keep us abreast of your progress.
OSD