Actually I have a working method now but it would be good to hear if there is a better method. I now have Windows 11 Hyper-V VM migrated to an LXD VM. Before exporting the VM from Hyper-V I ran the Microsoft sysprep utility. This is not ideal as there are a few steps to make sysprep work, e.g. no pending Windows updates, some UWP apps need to be deinstalled for all users (e.g. at least OneDrive), a new license for Windows and maybe some apps maybe required. I have not finished testing yet.