I believe this is using Virtualization.framework and not Containerization API from Tahoe, right?

Is there a limit on number of instances you can have per physical mac? i recall there was a hard limit of 2 because of EULA, unless Apple has changed it. (Cupertino really likes to sell you their Macs)

Correct, Containerization APIs are Linux VMs specific.

There's a kernel-level check in the Hypervisor framework that enforces the 2 VM limit, and bypassing it violates Apple's EULA.

Nice technical deep-dive on the how here: https://khronokernel.com/macos/2023/08/08/AS-VM.html