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After much experimentation and reading of documentation, I think that the answer to the problem is that when you are using nested virtualisation, your hypervisor type always appears as QEMU. However, you can confirm that you are using nested KVM on your compute nodes, by looking at the process line (ps -ef|grep qemu) of your created servers. It will look something like this:

/usr/libexec/qemu-kvm -name guest=instance-00000032,debug-threads=on -S -object secret,id=masterKey0,format=raw,file=/var/lib/libvirt/qemu/domain-1-instance-00000032/master-key.aes -machine pc-i440fx-rhel7.5.0,accel=kvm

(note the bold text) which shows that KVM acceleration is in use. Also, you'll be able to tell because your servers will be approximately a million times faster... :)