Thanks, I guess what I meant to ask is that is it normal for people to virtualize their own dedicated server these days by default?

Would this be a best practice to avoid hosting vendor lock-in?

There's no lock-in possible. It's a bare metal Linux machine, you do whatever you want with it; you can replace it with the PC under you desk if you want.

If you want to run k3s, k8s or docker, you can, but personally I find those too complicated. NixOS is much easier to deal with, and achieves the same result.

Sure, I use CapRover on mine.