Comment 6 for bug 1659604

Might be mis-reading the LXD codebase but it looks like the quota should be applied:

func containerConfigureInternal(c container) error {
    // Find the root device
    for _, m := range c.ExpandedDevices() {
        if m["type"] != "disk" || m["path"] != "/" || m["size"] == "" {
            continue
        }

        size, err := shared.ParseByteSizeString(m["size"])
        if err != nil {
            return err
        }

        err = c.Storage().ContainerSetQuota(c, size)
        if err != nil {
            return err
        }

        break
    }

    return nil
}