Hi,
to me it seems this is not a bug, but an issue with the default config.
To run virtualization in a LXD container - which by default is unprivileged for 
security you have to make some changes.
We will not change LXD/Libvirt defaults for that afaik, but the following is my 
recommendation as a container profile addition to get KVM+Libvirt running fine 
in a container.

config:
  boot.autostart: "true"
  linux.kernel_modules: openvswitch,nbd,ip_tables,ip6_tables,kvm
  security.nesting: "true"
  security.privileged: "true"
description: ""
devices:
  eth0:
    mtu: "9000"
    name: eth0
    nictype: bridged
    parent: lxdbr0
    type: nic
  kvm:
    path: /dev/kvm
    type: unix-char
  mem:
    path: /dev/mem
    type: unix-char
  tun:
    path: /dev/net/tun
    type: unix-char
name: kvm
used_by: []


You can create that with "lxc profile new kvm" and then launch those guests 
that need it with default+kvm profile, while leaving the other secure and 
unprivileged.
  $ lxc launch ubuntu-daily:c/amd64 c --profile default --profile kvm

I hope that helps to understand, but IMHO it is not a bug.

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https://bugs.launchpad.net/bugs/1802906

Title:
  libvirt inside lxd container cannot start virbr0 (Unable to set bridge
  virbr0 forward_delay: Permission denied)

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