I believe the current nightly build has corrected this error. My setup script on the current 7.5 nightly in Beaker did not fail with this error. Will fully verify later.

According to sosreport, the guest didn't have spec_ctrl available.  I don't know if this is a libvirt or virt-install bug, but moving it to libvirt so it can be investigated.

(What's the default CPU model used by virt-install?)

For reference, libvirt logs on sosreport shows that it is (incorrectly) using "-cpu Broadwell,+spec-ctrl,+rtm,+hle".

sos_commands/virsh/virsh_-r_capabilities:

<capabilities>
  <host>
    <uuid>4c4c4544-0030-3110-8037-b8c04f484b32</uuid>
    <cpu>
      <arch>x86_64</arch>
      <model>Broadwell-IBRS</model>
      <vendor>Intel</vendor>
      <microcode version='184549413'/>
      <topology sockets='1' cores='12' threads='2'/>
      <feature name='vme'/>
      <feature name='ds'/>
      <feature name='acpi'/>
      <feature name='ss'/>
      <feature name='ht'/>
      <feature name='tm'/>
      <feature name='pbe'/>
      <feature name='dtes64'/>
      <feature name='monitor'/>
      <feature name='ds_cpl'/>
      <feature name='vmx'/>
      <feature name='smx'/>
      <feature name='est'/>
      <feature name='tm2'/>
      <feature name='xtpr'/>
      <feature name='pdcm'/>
      <feature name='dca'/>
      <feature name='osxsave'/>
      <feature name='f16c'/>
      <feature name='rdrand'/>
      <feature name='arat'/>
      <feature name='tsc_adjust'/>
      <feature name='cmt'/>
      <feature name='stibp'/>
      <feature name='xsaveopt'/>
      <feature name='mbm_total'/>
      <feature name='mbm_local'/>
      <feature name='pdpe1gb'/>
      <feature name='abm'/>
      <feature name='invtsc'/>
      <pages unit='KiB' size='4'/>
      <pages unit='KiB' size='2048'/>
      <pages unit='KiB' size='1048576'/>
    </cpu>
[...]

sosreport-netqe25.knqe.lab.eng.bos.redhat.com-20180108172208/proc/cpuinfo:

processor       : 47
vendor_id       : GenuineIntel
cpu family      : 6
model           : 79
model name      : Intel(R) Xeon(R) CPU E5-2687W v4 @ 3.00GHz
stepping        : 1
microcode       : 0xb000025
cpu MHz         : 2866.149
cache size      : 30720 KB
physical id     : 1
siblings        : 24
core id         : 13
cpu cores       : 12
apicid          : 59
initial apicid  : 59
fpu             : yes
fpu_exception   : yes
cpuid level     : 20
wp              : yes
flags           : fpu vme de pse tsc msr pae mce cx8 apic sep mtrr pge mca cmov pat pse36 clflush dts acpi mmx fxsr sse sse2 ss ht tm pbe syscall nx pdpe1gb rdtscp lm constant_tsc arch_perfmon pebs bts rep_good nopl xtopology nonstop_tsc aperfmperf eagerfpu pni pclmulqdq dtes64 monitor ds_cpl vmx smx est tm2 ssse3 sdbg fma cx16 xtpr pdcm pcid dca sse4_1 sse4_2 x2apic movbe popcnt tsc_deadline_timer aes xsave avx f16c rdrand lahf_lm abm 3dnowprefetch epb cat_l3 cdp_l3 intel_pt tpr_shadow vnmi flexpriority ept vpid fsgsbase tsc_adjust bmi1 hle avx2 smep bmi2 erms invpcid rtm cqm rdt_a rdseed adx smap xsaveopt cqm_llc cqm_occup_llc cqm_mbm_total cqm_mbm_local dtherm ida arat pln pts
bogomips        : 6004.38
clflush size    : 64
cache_alignment : 64
address sizes   : 46 bits physical, 48 bits virtual
power management:

This would suggest libvirt detected the new feature in the host CPU via CPUID, but the kernel is not new enough to recognize it. Moreover, qemu-kvm-rhev is pretty old and doesn't support the new feature either:

* Fri Mar 24 2017 Miroslav Rezanina <mrezanin@redhat.com> - rhev-2.6.0-28.el7_3.9

I think virt-install by default takes the CPU model from libvirt's capabilities XML, which is Broadwell-IBRS. Since qemu-kvm-rhev does not support the new CPU model, libvirt uses Broadwell,+spec-ctrl,+rtm,+hle instead.

In other words, this was just a temporary issue with the compose when libvirt is updated while others are not updated yet. The problem can be fixed by detecting CPU capabilities via QEMU and teaching virt-install to use the CPU from domain capabilities. Libvirt does so with QEMU-2.10.

Just ran into this problem:

# virt-install --name node-2    --disk path=/var/lib/libvirt/images/node-2-disk1.qcow2,device=disk,bus=virtio,format=qcow2,cache=unsafe    --boot hd   --network network:management --virt-type kvm --cpu host-model --ram 8196 --vcpus 4 --os-variant rhel7 --import --noautoconsole --autostart --vnc --rng /dev/urandom

Starting install...
ERROR    internal error: process exited while connecting to monitor: 2018-04-18T20:47:24.690482Z qemu-kvm: CPU feature spec-ctrl not found
Domain installation does not appear to have been successful.
If it was, you can restart your domain by running:
  virsh --connect qemu:///system start node-2
otherwise, please restart your installation.


Versions:
qemu-kvm-rhev-2.6.0-28.el7_3.12.x86_64
qemu-kvm-common-rhev-2.6.0-28.el7_3.12.x86_64
ipxe-roms-qemu-20170123-1.git4e85b27.el7_4.1.noarch
qemu-img-rhev-2.6.0-28.el7_3.12.x86_64
libvirt-daemon-driver-qemu-3.9.0-14.el7_5.2.x86_64
libvirt-3.9.0-14.el7_5.2.x86_64
libvirt-libs-3.9.0-14.el7_5.2.x86_64
libvirt-daemon-kvm-3.9.0-14.el7_5.2.x86_64
kernel-3.10.0-862.el7.x86_64
kernel-tools-libs-3.10.0-862.el7.x86_64
kernel-headers-3.10.0-862.el7.x86_64
kernel-tools-3.10.0-862.el7.x86_64


# virsh capabilities
<capabilities>

  <host>
    <uuid>4c4c4544-0054-3210-8034-b4c04f39354a</uuid>
    <cpu>
      <arch>x86_64</arch>
      <model>Westmere-IBRS</model>
      <vendor>Intel</vendor>
      <microcode version='30'/>
      <topology sockets='1' cores='6' threads='2'/>
      <feature name='vme'/>
      <feature name='ds'/>
      <feature name='acpi'/>
      <feature name='ss'/>
      <feature name='ht'/>
      <feature name='tm'/>
      <feature name='pbe'/>
      <feature name='pclmuldq'/>
      <feature name='dtes64'/>
      <feature name='monitor'/>
      <feature name='ds_cpl'/>
      <feature name='vmx'/>
      <feature name='smx'/>
      <feature name='est'/>
      <feature name='tm2'/>
      <feature name='xtpr'/>
      <feature name='pdcm'/>
      <feature name='pcid'/>
      <feature name='dca'/>
      <feature name='arat'/>
      <feature name='stibp'/>
      <feature name='pdpe1gb'/>
      <feature name='rdtscp'/>
      <feature name='invtsc'/>
      <pages unit='KiB' size='4'/>
      <pages unit='KiB' size='2048'/>
      <pages unit='KiB' size='1048576'/>
    </cpu>
...


This is with a RHEL7.5 host installed and updated from RHN. 3 months after this BZ has been closed.

Should I reopen the BZ?

No, just update qemu-kvm-rhev, 2.6.0-28.el7_3.12.x86_64 is pretty old (released on Fri Jun 23 2017) and definitely not from 7.5.