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Make sure guest resizing is enabled in virt-manager:
Menu View -> Scale Display ->
Auto resize VM with window (Checked)
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Make sure your have a spice agent on your guest (the virtual machine)
https://www.spice-space.org/download.html#guest
‘spice-vdagent’ on linux
‘spice-guest-tools’ on windows
How I figured this out,
I found a setting in “spicy” that I assumed had an equivalent in virt-maanger. To connect with spicy from spice-client-gtk apt package, I found the port to connect to by checking sudo ss -nlp | grep qemu, and connected to that port on localhost. Spicy’s toggle was much easier to find: Options -> Resize guest to match window size (Checked).