If that rack is attached to the headtube, that may interfere with your V brake cable. You might be able to make it work with a different noodle, but with the existing noodle I am fairly confident that it is not going to work. It is not clear to me how that rack is attached to the headtube.
From the photo you provided of your bike, I am not sure if you have drop bars or flat bars. Some of the newer bikepacking setups use a harness to attach a sleeping bag to the handlebars. If drop bars, there is less room for bag width than with flat bars.
I take it that you do not plan to use a handlebar bag?