It does not make much sense for the operating system itself to run in virtual memory. This would be a nightmare situation where the operating system must maintain page tables for itself. Most multi-purpose CPUs support the notion of a physical address mode as well as a virtual address mode. Physical addressing mode requires no page tables and the CPU does not attempt to perform any address translations in this mode. The Linux kernel is linked to run in physical address space.
The Alpha AXP processor does not have a special physical addressing mode. Instead, it divides up the memory space into several areas and designates two of them as physically mapped addresses. This kernel address space is known as KSEG address space and it encompasses all addresses upwards from 0xfffffc0000000000. In order to execute from code linked in KSEG (by definition, kernel code) or access data there, the code must be executing in kernel mode. The Linux kernel on Alpha is linked to execute from address 0xfffffc0000310000.