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Yes, it is possible and in some scenarios even desirable. We're running a setup like this in production without any problems so far (that would be caused by the setup itself, that is).

The virtual network (vxlan/gre) is great for dynamic customer-side provisioning, because you don't have to configure a new VLAN across your network infrastructure each time a new Neutron network is created. The physical/provider network on the other hand, is more reliable performance- and management-wise.