This is something that could run on top of smolvm, if the authors chose it, rather than Lima/QEMU. It both sets up virtual machines and what goes into them, letting you chooose toolchains and coding agents. smolvm doesn't provide dev tool setup within a vm, though it does point to images that already have toolchains and agents installed.
smol supports docker so i can use any docker based toolchain setup i want and that is not tied to a new niche project
Indeed, but this new niche project is trying to provide a streamlined setup. Upon closer inspection of the toolchains, for Node, Rust, Go, and Python, it shows that it tries to automatically configure them.
This sort of wrapping setup of VMs in a higher level project is encouraged by BinSquare, the creator of smol machines, as recently on X he has been touting its embeddability.