A net-attach-def using "type: ovn-k8s-cni-overlay, topology:layer2"
does not work in a hosted pod when using the Kubevirt provider.

Note: As a general hosted multus sanity check, using a "type: bridge" NAD does work properly in a hosted pod and both interfaces start as expected:
  Normal  AddedInterface  86s   multus             Add eth0 [10.133.0.21/23] from ovn-kubernetes
  Normal  AddedInterface  86s   multus             Add net1 [192.0.2.193/27] from default/bridge-net

OCP 4.14.1
CNV 4.14.0-2385

Reproduced w/ multiple attempts when using OVN secondary network

1. Create the NAD on the hosted Kubevirt cluster:

apiVersion: k8s.cni.cncf.io/v1
kind: NetworkAttachmentDefinition
metadata:
  name: l2-network
spec:
  config: |-
    {
      "cniVersion": "0.3.1",
      "name": "l2-network",
      "type": "ovn-k8s-cni-overlay",
      "topology":"layer2",
      "netAttachDefName": "default/l2-network"
    }

2. Create a hosted pod w/ that net annotation:

apiVersion: v1
kind: Pod
metadata:
  annotations:
    k8s.v1.cni.cncf.io/networks:  '[
      {
        "name": "l2-network",
        "interface": "net1",
        "ips": [
          "192.0.2.22/24"
          ]
      }
    ]'
  name: debug-ovnl2-c
  namespace: default
spec:
  securityContext:
    seccompProfile:
      type: RuntimeDefault
    runAsNonRoot: true
    runAsUser: 1000
  containers:
  - name: debug-ovnl2-c
    command:
    - /usr/bin/bash
    - -x
    - -c
    - |
      sleep infinity
    image: quay.io/cloud-bulldozer/uperf:latest
    imagePullPolicy: Always
    securityContext:
      allowPrivilegeEscalation: false
      capabilities:
        drop:
        - ALL
  nodeSelector:
    kubernetes.io/hostname: kv1-a8a5d7f1-9xwm4

3. Pod remains in ContainerCreating because it cannot create the net1 iface, pod describe event logs:

Events:
  Type     Reason                  Age    From               Message
  ----     ------                  ----   ----               -------
  Normal   Scheduled               4m21s  default-scheduler  Successfully assigned default/debug-ovnl2-c to kv1-a8a5d7f1-9xwm4
  Warning  FailedCreatePodSandBox  2m20s  kubelet            Failed to create pod sandbox: rpc error: code = Unknown desc = failed to create pod network sandbox k8s_debug-ovnl2-c_default_1b42bc5a-1148-49d8-a2d0-7689a46f59ea_0(1e2d9008074c3c5af5ccbb2e7e2e7ca2466395b642a1677db2dfadd35eb84b73): error adding pod default_debug-ovnl2-c to CNI network "multus-cni-network": plugin type="multus-shim" name="multus-cni-network" failed (add): CmdAdd (shim): CNI request failed with status 400: '&{ContainerID:1e2d9008074c3c5af5ccbb2e7e2e7ca2466395b642a1677db2dfadd35eb84b73 Netns:/var/run/netns/5da048e3-b534-481d-acc6-2ddc6a439586 IfName:eth0 Args:IgnoreUnknown=1;K8S_POD_NAMESPACE=default;K8S_POD_NAME=debug-ovnl2-c;K8S_POD_INFRA_CONTAINER_ID=1e2d9008074c3c5af5ccbb2e7e2e7ca2466395b642a1677db2dfadd35eb84b73;K8S_POD_UID=1b42bc5a-1148-49d8-a2d0-7689a46f59ea Path: StdinData:[123 34 98 105 110 68 105 114 34 58 34 47 118 97 114 47 108 105 98 47 99 110 105 47 98 105 110 34 44 34 99 104 114 111 111 116 68 105 114 34 58 34 47 104 111 115 116 114 111 111 116 34 44 34 99 108 117 115 116 101 114 78 101 116 119 111 114 107 34 58 34 47 104 111 115 116 47 114 117 110 47 109 117 108 116 117 115 47 99 110 105 47 110 101 116 46 100 47 49 48 45 111 118 110 45 107 117 98 101 114 110 101 116 101 115 46 99 111 110 102 34 44 34 99 110 105 67 111 110 102 105 103 68 105 114 34 58 34 47 104 111 115 116 47 101 116 99 47 99 110 105 47 110 101 116 46 100 34 44 34 99 110 105 86 101 114 115 105 111 110 34 58 34 48 46 51 46 49 34 44 34 100 97 101 109 111 110 83 111 99 107 101 116 68 105 114 34 58 34 47 114 117 110 47 109 117 108 116 117 115 47 115 111 99 107 101 116 34 44 34 103 108 111 98 97 108 78 97 109 101 115 112 97 99 101 115 34 58 34 100 101 102 97 117 108 116 44 111 112 101 110 115 104 105 102 116 45 109 117 108 116 117 115 44 111 112 101 110 115 104 105 102 116 45 115 114 105 111 118 45 110 101 116 119 111 114 107 45 111 112 101 114 97 116 111 114 34 44 34 108 111 103 76 101 118 101 108 34 58 34 118 101 114 98 111 115 101 34 44 34 108 111 103 84 111 83 116 100 101 114 114 34 58 116 114 117 101 44 34 109 117 108 116 117 115 65 117 116 111 99 111 110 102 105 103 68 105 114 34 58 34 47 104 111 115 116 47 114 117 110 47 109 117 108 116 117 115 47 99 110 105 47 110 101 116 46 100 34 44 34 109 117 108 116 117 115 67 111 110 102 105 103 70 105 108 101 34 58 34 97 117 116 111 34 44 34 110 97 109 101 34 58 34 109 117 108 116 117 115 45 99 110 105 45 110 101 116 119 111 114 107 34 44 34 110 97 109 101 115 112 97 99 101 73 115 111 108 97 116 105 111 110 34 58 116 114 117 101 44 34 112 101 114 78 111 100 101 67 101 114 116 105 102 105 99 97 116 101 34 58 123 34 98 111 111 116 115 116 114 97 112 75 117 98 101 99 111 110 102 105 103 34 58 34 47 118 97 114 47 108 105 98 47 107 117 98 101 108 101 116 47 107 117 98 101 99 111 110 102 105 103 34 44 34 99 101 114 116 68 105 114 34 58 34 47 101 116 99 47 99 110 105 47 109 117 108 116 117 115 47 99 101 114 116 115 34 44 34 99 101 114 116 68 117 114 97 116 105 111 110 34 58 34 50 52 104 34 44 34 101 110 97 98 108 101 100 34 58 116 114 117 101 125 44 34 115 111 99 107 101 116 68 105 114 34 58 34 47 104 111 115 116 47 114 117 110 47 109 117 108 116 117 115 47 115 111 99 107 101 116 34 44 34 116 121 112 101 34 58 34 109 117 108 116 117 115 45 115 104 105 109 34 125]} ContainerID:"1e2d9008074c3c5af5ccbb2e7e2e7ca2466395b642a1677db2dfadd35eb84b73" Netns:"/var/run/netns/5da048e3-b534-481d-acc6-2ddc6a439586" IfName:"eth0" Args:"IgnoreUnknown=1;K8S_POD_NAMESPACE=default;K8S_POD_NAME=debug-ovnl2-c;K8S_POD_INFRA_CONTAINER_ID=1e2d9008074c3c5af5ccbb2e7e2e7ca2466395b642a1677db2dfadd35eb84b73;K8S_POD_UID=1b42bc5a-1148-49d8-a2d0-7689a46f59ea" Path:"" ERRORED: error configuring pod [default/debug-ovnl2-c] networking: [default/debug-ovnl2-c/1b42bc5a-1148-49d8-a2d0-7689a46f59ea:l2-network]: error adding container to network "l2-network": CNI request failed with status 400: '[default/debug-ovnl2-c 1e2d9008074c3c5af5ccbb2e7e2e7ca2466395b642a1677db2dfadd35eb84b73 network l2-network NAD default/l2-network] [default/debug-ovnl2-c 1e2d9008074c3c5af5ccbb2e7e2e7ca2466395b642a1677db2dfadd35eb84b73 network l2-network NAD default/l2-network] failed to get pod annotation: timed out waiting for annotations: context deadline exceeded
'
'
  Warning  FailedCreatePodSandBox  19s  kubelet  Failed to create pod sandbox: rpc error: code = Unknown desc = failed to create pod network sandbox k8s_debug-ovnl2-c_default_1b42bc5a-1148-49d8-a2d0-7689a46f59ea_0(48110f0ecc0979992108e4441ff06f50c0d90f527cbe0b8fe1ca18d5398b67eb): error adding pod default_debug-ovnl2-c to CNI network "multus-cni-network": plugin type="multus-shim" name="multus-cni-network" failed (add): CmdAdd (shim): CNI request failed with status 400: '&{ContainerID:48110f0ecc0979992108e4441ff06f50c0d90f527cbe0b8fe1ca18d5398b67eb Netns:/var/run/netns/cae8fab7-80c2-40b7-b1a7-49c8fc8732b2 IfName:eth0 Args:IgnoreUnknown=1;K8S_POD_NAMESPACE=default;K8S_POD_NAME=debug-ovnl2-c;K8S_POD_INFRA_CONTAINER_ID=48110f0ecc0979992108e4441ff06f50c0d90f527cbe0b8fe1ca18d5398b67eb;K8S_POD_UID=1b42bc5a-1148-49d8-a2d0-7689a46f59ea Path: StdinData:[123 34 98 105 110 68 105 114 34 58 34 47 118 97 114 47 108 105 98 47 99 110 105 47 98 105 110 34 44 34 99 104 114 111 111 116 68 105 114 34 58 34 47 104 111 115 116 114 111 111 116 34 44 34 99 108 117 115 116 101 114 78 101 116 119 111 114 107 34 58 34 47 104 111 115 116 47 114 117 110 47 109 117 108 116 117 115 47 99 110 105 47 110 101 116 46 100 47 49 48 45 111 118 110 45 107 117 98 101 114 110 101 116 101 115 46 99 111 110 102 34 44 34 99 110 105 67 111 110 102 105 103 68 105 114 34 58 34 47 104 111 115 116 47 101 116 99 47 99 110 105 47 110 101 116 46 100 34 44 34 99 110 105 86 101 114 115 105 111 110 34 58 34 48 46 51 46 49 34 44 34 100 97 101 109 111 110 83 111 99 107 101 116 68 105 114 34 58 34 47 114 117 110 47 109 117 108 116 117 115 47 115 111 99 107 101 116 34 44 34 103 108 111 98 97 108 78 97 109 101 115 112 97 99 101 115 34 58 34 100 101 102 97 117 108 116 44 111 112 101 110 115 104 105 102 116 45 109 117 108 116 117 115 44 111 112 101 110 115 104 105 102 116 45 115 114 105 111 118 45 110 101 116 119 111 114 107 45 111 112 101 114 97 116 111 114 34 44 34 108 111 103 76 101 118 101 108 34 58 34 118 101 114 98 111 115 101 34 44 34 108 111 103 84 111 83 116 100 101 114 114 34 58 116 114 117 101 44 34 109 117 108 116 117 115 65 117 116 111 99 111 110 102 105 103 68 105 114 34 58 34 47 104 111 115 116 47 114 117 110 47 109 117 108 116 117 115 47 99 110 105 47 110 101 116 46 100 34 44 34 109 117 108 116 117 115 67 111 110 102 105 103 70 105 108 101 34 58 34 97 117 116 111 34 44 34 110 97 109 101 34 58 34 109 117 108 116 117 115 45 99 110 105 45 110 101 116 119 111 114 107 34 44 34 110 97 109 101 115 112 97 99 101 73 115 111 108 97 116 105 111 110 34 58 116 114 117 101 44 34 112 101 114 78 111 100 101 67 101 114 116 105 102 105 99 97 116 101 34 58 123 34 98 111 111 116 115 116 114 97 112 75 117 98 101 99 111 110 102 105 103 34 58 34 47 118 97 114 47 108 105 98 47 107 117 98 101 108 101 116 47 107 117 98 101 99 111 110 102 105 103 34 44 34 99 101 114 116 68 105 114 34 58 34 47 101 116 99 47 99 110 105 47 109 117 108 116 117 115 47 99 101 114 116 115 34 44 34 99 101 114 116 68 117 114 97 116 105 111 110 34 58 34 50 52 104 34 44 34 101 110 97 98 108 101 100 34 58 116 114 117 101 125 44 34 115 111 99 107 101 116 68 105 114 34 58 34 47 104 111 115 116 47 114 117 110 47 109 117 108 116 117 115 47 115 111 99 107 101 116 34 44 34 116 121 112 101 34 58 34 109 117 108 116 117 115 45 115 104 105 109 34 125]} ContainerID:"48110f0ecc0979992108e4441ff06f50c0d90f527cbe0b8fe1ca18d5398b67eb" Netns:"/var/run/netns/cae8fab7-80c2-40b7-b1a7-49c8fc8732b2" IfName:"eth0" Args:"IgnoreUnknown=1;K8S_POD_NAMESPACE=default;K8S_POD_NAME=debug-ovnl2-c;K8S_POD_INFRA_CONTAINER_ID=48110f0ecc0979992108e4441ff06f50c0d90f527cbe0b8fe1ca18d5398b67eb;K8S_POD_UID=1b42bc5a-1148-49d8-a2d0-7689
a46f59ea" Path:"" ERRORED: error configuring pod [default/debug-ovnl2-c] networking: [default/debug-ovnl2-c/1b42bc5a-1148-49d8-a2d0-7689a46f59ea:l2-network]: error adding container to network "l2-network": CNI request failed with status 400: '[default/debug-ovnl2-c 48110f0ecc0979992108e4441ff06f50c0d90f527cbe0b8fe1ca18d5398b67eb network l2-network NAD default/l2-network] [default/debug-ovnl2-c 48110f0ecc0979992108e4441ff06f50c0d90f527cbe0b8fe1ca18d5398b67eb network l2-network NAD default/l2-network] failed to get pod annotation: timed out waiting for annotations: context deadline exceeded
'
'
  Normal  AddedInterface  18s (x3 over 4m20s)  multus  Add eth0 [10.133.0.21/23] from ovn-kubernetes 

Pod cannot start

Pod can start with additional "ovn-k8s-cni-overlay" network

Slack thread: https://redhat-internal.slack.com/archives/C02UVQRJG83/p1698857051578159
I did confirm the same NAD and pod definition start fine on the management cluster.