Perhaps I am reading what you wrote wrong but are you saying it can use Rosetta within an ARM Linux VM to run x86 applications in the VM?
https://docs.getutm.app/advanced/rosetta/
And FYI, this is also available in Docker Desktop for macOS, which allows better performance when running x86_64 containers compared to the older solution where Docker was using qemu.
Last time I checked, Rosetta only worked for one-off binaries, wouldn’t really allow docker to run more x86 code inside.
Rosetta is a tool for running x86-64 binaries on an arm64 OS.
I think you're asking if rosetta lets you run an x86 kernel, to which the answer is no - the whole point of this framework is to support virtualization, e.g. the OS is running directly on the hardware. The moment the OS can't do that, there is no point in doing anything other than emulation.