That error means the host running IncusOS is not exposing the KVM device needed for a VM. If IncusOS itself is running inside a VM, enable nested virtualization and pass through /dev/kvm; on bare metal, verify CPU virtualization is enabled in firmware and that the kernel KVM module is loaded. Once /dev/kvm exists with usable permissions, FreeBSD VM creation should be available.
Yes, BIOS is the right place. You don’t load /dev/kvm in the Incus UI; after enabling virtualization and rebooting, IncusOS should expose it automatically. The later secure-boot error shows KVM is now available.