Second, the simulation would have to be restricted in some sense. Either its reality's laws of physics would not be the same as ours or it would run slower then real-time (which would be odd, at least).
If the simulation would run slower then real-time, but within the same physical reality as ours, we could observe it, albeit in a very unfortunate manner: The evolution of the universe (expanding space, decaying particles) would show earlier in the "host reality" then in our "guest reality". Presumably, the simulation would become inconsistent before it would break down.
If the host universe has different laws of physics it is literally metaphysical. There is no point in trying to understand such a thing within the limits of our existence. So we can put this into the world of (religious) believe systems.