> Does the host kernel matter?

Honestly I don't know! We've seen it appear with host kernel 6.2.15 (https://bugzilla.redhat.com/show_bug.cgi?id=2213346#c5) but I'm not aware of anyone either reproducing or not reproducing it with earlier host kernels. All your other config looks right.

vmlinuz-6.4.0-0.rc6.48.fc39.x86_64 failed on my 6.0.0 host after 249 iterations.

We had another report that it happens on RHEL 8 host, which is a very much older (franken) kernel.

I noticed it hangs in similar way when you insert msleep anywhere before smp_prepare_cpus in kernel_init_freeable. But I have no idea whether sleeping is valid here.

Can confirm - just adding msleep(1) there causes the same failure. I'm also unclear if sleeping here is valid or not.