SmartOS offers two ways to host VMs: Zones & KVM. Zones is os-virtualization, so you run SmartOS zones on SmartOS but it uses the same kernel. KVM is hardware virtualization and allows you to run other operating systems on top. So you can have Linux, FreeBSD, Windows or even nested SmartOS with a different kernel running inside.

So zones make running nested SmartOS with KVM a bit uncommen. While possible there are not that many use cases besides development on the system itself.