Nesting is a key part of any system to make it truly general purpose. It seems crazy that for years we lived with non-nestable VM's.

It goes hand in hand with the fact that an emulated or virtualized system shouldn't be able to tell that it is emulated (if the emulator doesn't want it to know). It should run as if on real hardware. Inability to do nested virtualization reveals immediately that emulation is in play.

You just need access to precise timers to tell if you are virtualized. If you can measure how long a full TLB miss takes vs just a cache miss you should be able to tell how deeply is your page table nested.

An emulator can emulate timers however it likes...

Ok, but that means that you can't have accurate wall clock time inside your virtual machine. Also, it would make most games impossible as all physics is ultimately tied to a clock. And of course a connection to internet is impossible.

Nested virtualization including the ARMv8.4 improvements are present on Apple M1.

However, Apple's virtualization solution doesn't currently support those.