The culprit is really the system update (most probably the libvirt).
Before the VM guest was running with
cpu mode=host-model more than one year. However now it was necessary to edit VM guest XML deffinition file -
virsh edit <domain>. The
cpu mode entry must have been changed to
<cpu mode='host-passthrough' check='partial'/>
After this change, the VM guest with Kubuntu booted up without any problem.
According to libvirt documentation, the
host-model can cause CPU detection problems to VM guest OS. The
host-passthrough avoids this issues as provides exactly the same type of CPU (and it's features). However makes difficulties with migration to different VM host. The other VM host must be exactly of the same type of CPU.
Interesting thing is that another VM guest with CentOS was still able to boot without any problem...