I have run 8 different test cases with this instance (test-ext4-block-mount with config shown in my original post).
In 6 of these test cases, I replaced the 'raw.mount.options` line in the original instance with one of the following lines, respectively:
raw.mount.options: nosuid
raw.mount.options: nodev
raw.mount.options: noexec
raw.mount.options: relatime
raw.mount.options: ro
raw.mount.options: rw
In each of these cases starting the instance failed with exactly the same error message shown in my original post
The the remaining 2 test cases, I replaced the 'raw.mount.options` line with one of the following lines, respectively:
readonly: "true"
readonly: "false"
In each of these last 2 cases, the instance started up fine, and the mount worked, as indicated by these respective lines from the output of findmnt run in the instance
/top /proc/self/fd/35 ext4 ro,relatime
/top /proc/self/fd/90 ext4 rw,relatime
In summary, the 'raw.mount.options` line does not seem to be accepted regardless of which option it specifies.