Privileged Docker container in privileged LXD container

[blockmurder]

Issue description:

Trying to run privileged docker container in a privileged LXD container. Goal would be to run a rancher/agent:v1.0.2 container, but it does not work with ubuntu:latest either.

Steps to reproduce:

Run a container (ubuntu:16.04, privileged) with instructions found here: https://www.stgraber.org/2016/04/13/lxd-2-0-docker-in-lxd-712/

Apply lxc profile device add docker tuntap unix-char path=/dev/net/tun to fix issue discussed here:
https://bugs.launchpad.net/ubuntu/+source/lxd/+bug/1593301/comments/2

Run docker run -d --name test --privileged ubuntu:latest which produces the following output:
3d6a5d25c7c9390aeb7a447b86e8cf79b33f5b68948bd0238e58c858c2e57c06
docker: Error response from daemon: Container command not found or does not exist..

Tested with docker.io 1.10.3 and docker.io 1.11.2(proposed), unprivileged Docker containers running fine...

This bug has been filed on LXD github repository as well:
https://github.com/lxc/lxd/issues/2172

LXD Host:
DistroRelease: Ubuntu 14.04 LTS 4.4.0-28-generic
Package: lxd 2.0.2-0ubuntu1~16.04.1

Docker container:
DistroRelease: Ubuntu 14.04 LTS 4.4.0-28-generic
Package: docker.io 1.10.3-0ubuntu6

[Launchpad Janitor (janitor)]

Status changed to 'Confirmed' because the bug affects multiple users.

[Anibal Rivero (anibalrivero)]

LXD Host:
DistroRelease: Ubuntu 16.04 LTS 4.4.0-22-generic
Package: lxd
Version: 2.0.0-0ubuntu4

Docker:
Package: docker.io
Version: 1.10.3-0ubuntu6

[Velkan (velkan-s)]

Similar with docker.io 1.12.6-0ubuntu1~16.04.1.

[Christian Ehrhardt  (paelzer)]

Linked back the LXD issue that was filed as a bug task to get auto-tracking.
But FYI - the status there is to currently wait on docker packaging expertise from here.

[Athos Ribeiro (athos-ribeiro)]

This seems to be fixed since bionic.

From a jammy host, I was able to run a jammy privileged lxc container and within it, run a privileged docker container.

From a jammy host, I was able to run a bionic privileged lxc container and within it, run a privileged docker container.

From a bionic host, I was able to run a bionic privileged lxc container and within it, run a privileged docker container.

For instance:

# lxc launch ubuntu-daily:bionic docker-b-priv -c security.nesting=true

Run the container, install docker, and from within it, run

# docker run --name test --privileged ubuntu:latest echo hello privileges

Which should print
"hello privileges"