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I'm looking for virtualization-based desktop Linux setup
(piefed.social)
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What? I'm looking for minimal setup but for desktop use (by this I mean machine which I'll be using as my workstation), not for a server. I don't think that Proxmox will be minimal option for this purpose when it have features which I don't need at all because the software on it is primarily designed for remotely controlled servers. For example I don't need WebUI function, instead I need simple desktop environment to manage my machines directly from a machine. Of course I can install desktop environment on it but why when it have completely different use case?
The short answer is any. KVM is built in to the kernel. You can run VMM (Virtual Machine Manager) for a simple, easy GUI, but you can also manually edit the VM files if that's your thing. You can air gap them by creating a bridge that doesn't bind to a nic.
Anything debian (which includes ubuntu based) just run
See: https://youtu.be/FNcImbM8ugg
The much longer answer is, it really depends on your needs for a daily driver, not for virtualization. Figure out what you need for a dd, then use that and install the tools.
Which isn't a "minimal" Linux installation. Which is fine - you don't actually need a "minimal" system. I'm not sure you even know why you want that. Just install any Linux distro and go to town. You can remove things if you like.