Firejail with spawning nested Xorg works fine for me, including text-only copypaste between "host" and "guest" and automatic file synchronization through bind-like mounts. For some firejails I also use Linux network namespaces to control traffic going through taps. My introduction to this approach was the alternative Gentoo handbook by Sakaki[1], but the principles would apply on any distro.
There's also a very interesting read on Qubes-like experience on NixOs with Wayland and XWayland[2,3].
[1]: https://wiki.gentoo.org/wiki/User:Sakaki/Sakaki%27s_EFI_Inst...
[2]: https://roscidus.com/blog/blog/2021/03/07/qubes-lite-with-kv...
[3]: https://roscidus.com/blog/blog/2021/10/30/xwayland/