Unable to Create VMs using virt-manager

I am trying to create some VM using the virt-manager and no matter what I do I am getting this error:

Unable to complete install: 'internal error: guest failed to start: Failure in libvirt_lxc startup: Failed to create /var/lib/libvirt/images/vol.qcow2/.oldroot: Not a directory

Traceback (most recent call last):
  File "/usr/share/virt-manager/virtManager/asyncjob.py", line 65, in cb_wrapper
    callback(asyncjob, *args, **kwargs)
  File "/usr/share/virt-manager/virtManager/createvm.py", line 2001, in _do_async_install
    installer.start_install(guest, meter=meter)
  File "/usr/share/virt-manager/virtinst/install/installer.py", line 701, in start_install
    domain = self._create_guest(
  File "/usr/share/virt-manager/virtinst/install/installer.py", line 649, in _create_guest
    domain = self.conn.createXML(install_xml or final_xml, 0)
  File "/usr/lib/python3.9/site-packages/libvirt.py", line 4035, in createXML
    if ret is None:raise libvirtError('virDomainCreateXML() failed', conn=self)
libvirt.libvirtError: internal error: guest failed to start: Failure in libvirt_lxc startup: Failed to create /var/lib/libvirt/images/vol.qcow2/.oldroot: Not a directory

I have tried to set in /etc/libvirt/qemu.conf the user and group to match my user and group, installed libvirt-glusterfs and it doesn’t work. I am using: libvirtd (libvirt) 7.0.0 and virt-manager v.3.2.0. And this is my machine:

System:    Kernel: 5.11.1-1-MANJARO x86_64 bits: 64 compiler: gcc v: 10.2.1 Desktop: i3 4.19.1 info: i3bar 
           dm: LightDM 1.30.0 Distro: Manjaro Linux 
Machine:   Type: Desktop System: Micro-Star product: MS-7C84 v: 1.0 serial: <filter> 
           Mobo: Micro-Star model: MAG X570 TOMAHAWK WIFI (MS-7C84) v: 1.0 serial: <filter> 
           UEFI: American Megatrends LLC. v: 1.53 date: 12/30/2020 
Battery:   Device-1: hidpp_battery_0 model: Logitech MX Keys Wireless Keyboard serial: <filter> 
           charge: 100% (should be ignored) rechargeable: yes status: Discharging 
           Device-2: hidpp_battery_1 model: Logitech Wireless Mouse MX Master 3 serial: <filter> 
           charge: 10% (should be ignored) rechargeable: yes status: Discharging 
CPU:       Info: 12-Core model: AMD Ryzen 9 5900X bits: 64 type: MT MCP arch: Zen 3 rev: 0 L2 cache: 6 MiB 
           flags: avx avx2 lm nx pae sse sse2 sse3 sse4_1 sse4_2 sse4a ssse3 svm bogomips: 177690 
           Speed: 3609 MHz min/max: 2200/5994 MHz boost: enabled Core speeds (MHz): 1: 3609 2: 2874 3: 2879 4: 2878 
           5: 3595 6: 2876 7: 2876 8: 3597 9: 2890 10: 2880 11: 2196 12: 2199 13: 2878 14: 2198 15: 2197 16: 2199 
           17: 2291 18: 3593 19: 2880 20: 2932 21: 2197 22: 2198 23: 2199 24: 2199 
Graphics:  Device-1: Advanced Micro Devices [AMD/ATI] Ellesmere [Radeon RX 470/480/570/570X/580/580X/590] 
           vendor: Hewlett-Packard driver: amdgpu v: kernel bus ID: 2d:00.0 chip ID: 1002:67df class ID: 0300 
           Display: x11 server: X.Org 1.20.10 compositor: picom v: git-dac85 driver: loaded: amdgpu 
           resolution: 3440x1440~60Hz s-dpi: 96 
           OpenGL: renderer: AMD Radeon RX 480 Graphics (POLARIS10 DRM 3.40.0 5.11.1-1-MANJARO LLVM 11.1.0) 
           v: 4.6 Mesa 20.3.4 direct render: Yes 
Audio:     Device-1: AMD Ellesmere HDMI Audio [Radeon RX 470/480 / 570/580/590] vendor: Hewlett-Packard 
           driver: snd_hda_intel v: kernel bus ID: 2d:00.1 chip ID: 1002:aaf0 class ID: 0403 
           Device-2: Advanced Micro Devices [AMD] Starship/Matisse HD Audio vendor: Micro-Star MSI driver: snd_hda_intel 
           v: kernel bus ID: 2f:00.4 chip ID: 1022:1487 class ID: 0403 
           Device-3: C-Media CM108 Audio Controller type: USB driver: hid-generic,snd-usb-audio,usbhid bus ID: 1-2:2 
           chip ID: 0d8c:013c class ID: 0300 
           Sound Server: ALSA v: k5.11.1-1-MANJARO 
Network:   Device-1: Realtek RTL8125 2.5GbE vendor: Micro-Star MSI driver: r8169 v: kernel port: f000 bus ID: 26:00.0 
           chip ID: 10ec:8125 class ID: 0200 
           IF: enp38s0 state: down mac: <filter> 
           Device-2: Intel Wi-Fi 6 AX200 driver: iwlwifi v: kernel port: f000 bus ID: 28:00.0 chip ID: 8086:2723 
           class ID: 0280 
           IF: wlo1 state: up mac: <filter> 
           IF-ID-1: virbr0 state: down mac: <filter> 
Bluetooth: Device-1: Intel AX200 Bluetooth type: USB driver: btusb v: 0.8 bus ID: 1-4:3 chip ID: 8087:0029 class ID: e001 
           Message: Required tool hciconfig not installed. Check --recommends 
Drives:    Local Storage: total: 1.59 TiB used: 464.75 GiB (28.5%) 
           ID-1: /dev/nvme0n1 vendor: Samsung model: SSD 970 EVO Plus 1TB size: 931.51 GiB speed: 31.6 Gb/s lanes: 4 
           rotation: SSD serial: <filter> rev: 2B2QEXM7 temp: 36.9 C scheme: GPT 
           ID-2: /dev/sda vendor: Crucial model: CT750MX300SSD1 size: 698.64 GiB speed: 6.0 Gb/s rotation: SSD 
           serial: <filter> rev: R011 scheme: GPT 
Partition: ID-1: / size: 896.01 GiB used: 464.72 GiB (51.9%) fs: btrfs dev: /dev/nvme0n1p3 
           ID-2: /boot/efi size: 511 MiB used: 34.6 MiB (6.8%) fs: vfat dev: /dev/nvme0n1p1 
           ID-3: /home size: 896.01 GiB used: 464.72 GiB (51.9%) fs: btrfs dev: /dev/nvme0n1p3 
Swap:      ID-1: swap-1 type: partition size: 35 GiB used: 0 KiB (0.0%) priority: -2 dev: /dev/nvme0n1p2 
Sensors:   System Temperatures: cpu: 42.5 C mobo: N/A gpu: amdgpu temp: 38.0 C 
           Fan Speeds (RPM): N/A gpu: amdgpu fan: 1540 
Info:      Processes: 462 Uptime: 17m wakeups: 4 Memory: 31.34 GiB used: 3.13 GiB (10.0%) Init: systemd v: 247 Compilers: 
           gcc: 10.2.0 clang: 11.1.0 Packages: pacman: 1394 Shell: fish v: 3.1.2 running in: urxvtd inxi: 3.3.01


please check where you want to save VM disk image. You provide path to a directory not a actual disk file.
Proper path should end with vol.qcow2 in your case.

You need to Change the connection from LXC to KVM/QEMU.