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it can be installed as VM but to spin VMs on top of it you need to enable nested virtualization (which negatively affects the performance)

so the best way is just install harvester on machine such as operating system

yes, that's what it is meant for

In addition to nested virtualisation, for Harvester to be usable you'd also have to assign each virtual Harvester node enough vCPUs, RAM, and storage to run Harvester plus any VMs