Such a system wouldn’t be a VM but an emulator. They already exist and are routinely used. There are also specialized low level emulators, too, and even logic a

Such a system wouldn’t be a VM but an emulator. They already exist and are routinely used. There are also specialized low level emulators, too, and even logic analyzers at the electronics level. But all that does not really help fuzz a kernel quickly, which is much better done with a normal VM plus an emulated device, as the researchers did.