I am setting up a Linux server (probably will be NixOS) where my VM disk files will be stored on top of an NTFS partition. (Yes I know NTFS sucks but it has to be this way.)

I am asking which guest filesystem will have the best performance for a very mixed workload. If I had access to the extra features of BTRFS or ZFS I would use them but I have no idea how CoW interacts with NTFS; that is why I am asking here.

Also I would like some NTFS performance tuning pointers.

I have no idea how CoW interacts with NTFS

With btrfs you can disable COW for specific files, that might give you a little performance boost.

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