KVM nested virtualization: guest ioctl calls

Resending with subject. I am newbie in nested KVM virtualization and I am trying to understand the code for nested virtualization. I am not able to understand how nested guest's ioctl calls are intercepted by KVM.Does each ioctl of nested guest is intercepted by L0 or it is passed to L1? Can anyone please help me with this or correct me if I am totally off the track?