This allows for GPU acceleration without the firmware/hardware nightmare that is PCI passthrough. It is in production in ChromeOS for Qualcomm GPUs, under development for Intel, AMD, and GPUs, and neither requires nor uses GPU hardware virtualization support. It works by forwarding the GPU kernel driver API, which is already a security boundary. Most kernel driver vulnerabilities are mitigated, as ioctl submission is serialized and arguments are at least somewat validated.
Qubes OS will be using native contexts for GPU virtualization (QubesOS/qubes-issues#8552) and I am interested in collaborating on the implementation. I presented on this at Xen Project Summit 2024.