Both. The hardware virtualization related settings are configured out side of OCI spec but the runtime accept OCI spec and plays with it accordingly. As for image format, Kata runs unchanged docker images.
The most important challenge that Docker faced was where it wanted to position itself, IWO, as a solid stable building block for container infrastructure, or as a all-in-one-alike container solution. Now that Docker has made its decision to push Swarm mode, it is getting better for productions. There are instabilities here and there but it will come around sooner or later.