In the file docs/tools-reference/custom-kernels-distros/run-a-distribution-supplied-kernel-with-kvm.md, I think 2 things should be clarified:
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There are two options for running a distribution supplied kernel.
The "GRUB 2" boot option. Using this requires the root image to have a filesystem but no partitions. The grub2 setup seems to be hardwired to set root=(hd0) and prefix=(hd0)/boot/grub. This setup needs you to run update-grub to refresh the files in /boot/grub, but grub-install is not necessary.
The "Direct boot" option. If your disk image has a partition table and filesystems on those partitions (e.g. a separate /boot) -- as is commonly done by many distro installers. In this case, grub-install must be run to install grub into the MBR of the virtual disk device.
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When running such a BYO kernel configuration, Linode are limited in terms of the support they are able to offer.