That would definitely be a technical challenge, but also it's absolutely possible.
I used to do dual-boot Windows + Linux and I could run the Linux installation from a VM in Windows as well as the Windows installation from a VM in Linux.
When rebooting between metal and VM, Windows would always spend a few minutes "doing things" before continuing to boot, but it worked.
Linux would not even fret. It would just boot normally without any complaints.
I don't remember exactly which distro I had at the time, but probably it was Linux Mint.
Iirc I had a Windows 7 (maybe 8 or 10) Home OEM, original (not cracked), but it still worked. Perhaps if I had kept using it for long periods in the VM it would have started complaining? Anyways I booted it baremetal from time to time, so maybe that's why it kept working.