Part of the display is unresponsive in VMs

Affected version

• GNOME 43.4
• Windowing System: Wayland
• Virtualization: KVM
• Guest OS: Fedora Linux 37.20230306.0 (Silverblue), NixOS Unstable
• Host OS: Fedora Linux 37.20230306.0 (Silverblue)

Bug summary

Under KVM/QEMU/Spice/VirGL on virt-manager, GNOME Shell is not responsive and almost 80% of the screen does not respond to mouse clicks. Only the right side menu on the topbar is responding to clicks. However if auto-login is disabled and I login manually, then GNOME Shell is fully responsive.

Steps to reproduce

1. Install Fedora Worstation or Silverblue (or NixOS Unstable) on virt-manager under Spice and VirGL
2. Enable automatic login for the user
3. Reboot

What happened

GNOME Shell does not render fully and not responding to clicks except on right side menu on topbar.

What did you expect to happen

GNOME Shell should be fully rendered and functional.

Relevant logs, screenshots, screencasts etc.