Issue was discussed by Libvirt devs on RedHat bugzilla:
https://bugzilla.redhat.com/show_bug.cgi?id=1320263#c4
I even linked to a secure clipboard proposal that would have given a secure clipboard functionality by copying Qubes style interaction. It went no where and was closed as WONTFIX.
https://bugzilla.redhat.com/show_bug.cgi?id=1320263#c5
Updated linked ticket with this info.