I followed the comment by @dom0 here: Debian-minimal template for sys-audio - #47 by dom0
At the end of it I was able to setup a sys-audio VM without any issues (I didn’t make it a disposable VM however, just a regular AppVM). Passthrough works although I had some difficulty in getting it to work at first.
However there’s no sound and videos don’t play on say Firefox in any VM. When I run pavucontrol from sys-audio I do see the VMs name in Playback, but for some reason no sound is going through.
I tried to add this line to /etc/modprobe.d/50-alsa.conf in dom0 as suggested in Setting up an audio VM - #24 by hamenarin but still no sound.
options snd_hda_intel enable=1 index=0 power_save=0
Would really appreciate it if someone could help me debug this issue.