Thank you for putting this solution together and thanks to Mrmacintosh for the great YouTube walkthrough.
I got a Monterey VM set up, and I thought I would also setup Big Sur VM. I knew I would need the macos Virtual Machine folder in the Library/Containers folder to be freed up for me to go through the DFU, firmware installation, and OS installation process again, so I attempted to rename it to Library/Containers/macos monterey virtual machine.
I also modified the plist.info file in the .app package generated by the xcode build so that it would look for disk.img in the renamed folder.
However, the screen just boots up a black screen. I put everything back to how it was and am still getting the black screen.
There is nothing important on the VM, but I would love to learn more about this process and am wondering what modifying Info.plist did to the VM? Did this somehow mess with the signing process? I have modified info.plist files before when creating apps. I only changed CFBundleName and CFBundleExecutable, and when it didn't work, I changed them back to the original values.