I've setup FydeOS on Unraid, it's working well.
The key to make it boot maybe a graphic card attached to the VM.
I got this clue while trying it on a real pc and see these boot options
'Image A with intel grapchics card'
'Image A with non-intel graphics card'
Here is my setup.
BIOS: SeaBios
Machine: I440fx-3.1
Storage1 : FydeOS_PC_v8.1-stable.img , MODE: USB
Storage2: qcow 128G SATA
graphics: intel graphcis passthrough
Network: PCIe ethernet passthrough
Other: PCIe USB hub passthrough
Start, no chance to choose anything, will see bios init and saying 'Kernel is booting'
May wait 30s for graphic logo show up
Then everything is working
You may try the system now, and install the system to disk.