Generally, a Virtual Slave is a function of a single physical Device that represents multiple I3C Slaves on the I3C Bus, such that the I3C Master can address each of those Slaves independently.
In the simplest form a Virtual Slave could be one of a set of several Slave Devices all integrated into the same physical package, sharing a common set of pins connecting them to an I3C Bus.
In a more advanced form, a Virtual Slave could act as one of several virtualized functions presented by a highly‑integrated Device that stores a different Dynamic Address for each function. Depending on the implementation, such virtualized functions might share configuration information, and might return the same values for some CCCs.
Examples could include Bridging or Routing Devices, as well as other types of Devices that expose multiple functions and use shared Peripheral logic. I3C v1.1 defines several new capabilities and features for such Virtual Slaves.
See the I3C v1.1 Specification at Section 18.104.22.168.19, and the System Integrators Application Note for I3C[MIPI05] at Section 5.7.