I am trying to understand the risk exposures of vanilla options that also have a European barrier on realized volatility. For example, the option could knock out if the realized volatility over the time of the option exceeds a certain value (which could be set to be relatively low in order to cheapen the option). How would one do hedging for such instruments? How do risk exposures look like? Most of all, I am interested in understanding how such an instrument is influenced by the mean reversion speed, mean reversion level and especially by the (possibly time-dependent) volatility-of-variance.
Any reference would be much appreciated. Until now I could not find anything relevant, which is probably because I am using the wrong terms.