Can I perform a 1:1 translation of my libvirt domain xml to a VM Spec?
Probably not, libvirt is intended to be run on a host and the domain XML is based on this assumption, this implies that the domain xml allows you to access host local resources i.e. local paths, host devices, and host device configurations.
A VM Spec on the other hand is designed to work with cluster resources. And it does not permit to address host resources.
Does a VM Spec support all features of libvirt?
No, libvirt has a wide range of features, reaching beyond pure virtualization features, into host, network, and storage management. The API was driven by the requirements of running virtualization on a host.
A VM Spec however is a VM definition on the cluster level, this by itself means that the specification has different requirements, i.e. it also needs to include scheduling information and KubeVirt specifically builds on Kubernetes, which allows it to reuse the subsystems for consuming network and storage, which on the other hand means that the corresponding libvirt features will not be exposed.