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Thanks for this well written and clear document. I don't see any transport-specific issues as this is only a new encapsulation into an existing protocol. However, I have a few minor general comments below.

Some more general comments:
---
Sec 1:
" The IOAM-Data-Fields are defined in
   [RFC9197].  An implementation of IOAM which leverages NSH to carry
   the IOAM data is available from the FD.io open source software
   project [FD.io]."
Not sure if it is appropriate to refer to a single example implementation in the intro.

Sec 3:
"The applicability of the IOAM Active and Loopback flags
   [I-D.ietf-ippm-ioam-flags] is outside the scope of this document and
   may be specified in the future."
I don't really understand why this sentence is here. I don't think it gives anything to the reader.

Also Sec 3:
Maybe I'm misunderstanding something, or maybe this is okay but I would like to double-check that this is not contradicting:
"The operator MUST
   ensure that all nodes along the service path support IOAM."
and
"When a packet with IOAM is received
   at an NSH based forwarding node such as an Service Function Forwarder
   (SFF) that does not understand IOAM header, it SHOULD drop the
   packet."
because if all nodes are IOAM enables, this second condition should never happen. I not proposing to remove the second sentence but maybe the first one actually doesn't add much well (or not at least not be normative). Or it should maybe say something like:
"If not all notes a long path are IAOM enables, the packet might be drop, there an operator needs to take care to configure all nodes appropriately."...?

Editorial
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Sec 3: "containing the different IOAM-Data-Fields."
Why different? Different from what? I guess you mean various? Maybe just drop that word? -> "containing the IOAM-Data-Fields."