CoW won't necessarily make the VM image bloated. In fact, as I've foolishly found out, BTRFS can be quite useful for deduplicating very similar VMs at the block level, at the cost of needing to re-allocate new disk space on writes. In my VM archive, six 50 GiB virtual machines took up 52 GiB rather than 300 GiB and that was quite impressive.
Many downsides to CoW are also present with many common alternatives (i.e. thin LVM2 snapshots). Best to leave all of that off if you're using spinning rust or native compression features, though.