I store my Linux VM disk inside a file on a Mac filesystem (HFS+, the old one), and I haven't noticed any significant human-noticable I/O latency issues when using it. The Linux VM disk is formatted as ext4.

That's about human-scale experience, rather than measured latency. It won't be as fast as native, but it seems adequate for my use, even when grepping thousands of files, unpacking archives, etc, and I haven't noticed any significant stalling or pauses. It's encrypted too (by MacOS).

(That's in contrast to host-guest file access over the virtual network, which definitely has performance issues. But ext4 on the VM disk seems to work well.)

The VM is my main daily work "machine", and I'm a heavy user, so I'd notice if I/O latency was affecting use.

I'm sure it helps that the Mac has a fast SSD though.

(In contrast, on servers I use LVM a lot, in conjunction with MD-RAID and LUKS encryption.)