Firstly the Rancher docs note that the "Docker installation is for development and testing environments only" - see
https://ranchermanager.docs.rancher.com/pages-for-subheaders/other-installation-methods
So you install Rancher into a Kubernetes cluster but not any of the ones you want to manage - same applies to Harvester. If you install Rancher within Harvester (doesn't matter whether Docker on a VM or within Kubernetes in VMs) and Harvester breaks then chances are you've also broken Rancher.
Sure for dev/test it's okay but you do so knowing the risks - I currently have Rancher in Docker in a Harvester VM in my home lab but I'm looking to change that.