Can Nios II custom instruction feature be used to create SIMD type instructions?
Yes, it bypasses the ALU and there is a container for inserting your own logic to operate on instructions. If the data size is similar, it should be possible to create any logic you want as long as it falls withing the timing and data witdh of the NIOS custom instruction. Check the site on custom nios instructions

Nios II custom instructions are custom logic blocks adjacent to the arithmetic logic unit (ALU) in the processor’s datapath.


  When custom instructions are implemented in a Nios II system, each
  custom operation is assigned a unique selector index. The selector
  index allows software to specify the desired operation from among up
  to 256 custom operations. The selector index is determined at the time
  the hardware is instantiated with the Platform Designer or Platform
  Designer (Standard) software. Platform Designer exports the selection
  index value to system.h for use by the Nios II software build tools.


Source: https://www.intel.com/content/www/us/en/programmable/documentation/cru1439932898327.html