This idea isn't new at all. In fact, it's largely a conceptual throwback to the days before even batch schedulers where programs had to initialize the machine they were running on. The modern libOS dates from MIT research in exokernels during the 90s, itself an incremental step further of the numerous microkernel projects like SPIN, V-System, Mach, Amoeba and so forth.

It's a 1950s idea updated to 21st century standards using 1970s dynamic linking, sometimes but not necessarily meant to be run under a hypervisor.

Well, hypervisors and OS kernels are largely mirrors of each other, and it doesn't make architecturally to have both. Some people, like the creator of this project, favor squeezing out the OS kernel. Other people, like the LXC people, prefer squeezing out hypervisors and letting OS kernels do it all. Both suck. All software sucks. Software is hell. Every moment is a living nightmare of pain.