hansonmi ,
thanks for checking this up. So it seems it may be related only to my hardware, which would be both good and bad, because it means that nesting is by itself working fine and bad for me, that it is not performing well on my hardware only.
But I just want to ensure that we are checking the same thing - I was experiencing the performance degradation only inside the VM itself after enabling hyper-v role in it, not on the host. The host is performing fine for me, only the VM is performing badly after I enable nesting for it and install hyper-v role inside it. Comparing CPU-Z benchmark numbers before installing hyper-v in that VM and after installing hyper-v is the quickest way to check if there is any degradation and in my case it is between 10-40%, which is quite huge.
I am also not observing any CPU utilization spikes, only the raw performance of the VM is degraded.