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if you're automating the creation and deployment of vms, and the downstream operating systems, and not doing some sort of HA/failover meme setup... proxmox makes things way more complicated than raw libvirt/qemu/kvm.
Can you please elaborate on this? I am currently using MicroOS and think about NixOS because of quick setup. But also about Proxmox and NixOS on top. Where would libvirt fit in in this scenario?
If you ran a raw Ubuntu/fedora/whatever, you can use qemu/libvrt to run small virtual machines as required. You start and stop them with virsh, define them with simple xml files, and can easily automate the creation/destruction of them if desired.