It absolutely does on linux (which uses the qemu driver). <url> is a custom image URL that is in http://, https://, or file:// format.
As long as the image is a "cloud" image with cloud-init installed it works fine. I tested this with a fedora image on linux.
> However, your question is actually whether on MacOS you can have nested virtualization. Because, if MacOS (and Multipass support) it, then this is what you need.
This was not my question, but I don't believe nested virt is supported on macOS with multipass. Someone correct me if i'm wrong but I think nested virt is only available via VMware Fusion on macOS, multipass uses hypervisor.framework via hyperkit