Can't create devcontainer on azure

[TWpgo]

I tried to run a devcontainer in Azure but get this error:

[15:14:02] debug Installing DevPod daemon into server...
[15:14:02] info exit status 100
[15:14:02] info install docker
[15:14:02] info github.com/loft-sh/devpod/cmd/agent/workspace.initWorkspace
[15:14:02] info /home/runner/work/devpod/devpod/cmd/agent/workspace/up.go:239
[15:14:02] info github.com/loft-sh/devpod/cmd/agent/workspace.(*UpCmd).Run
[15:14:02] info /home/runner/work/devpod/devpod/cmd/agent/workspace/up.go:82
[15:14:02] info github.com/loft-sh/devpod/cmd/agent/workspace.NewUpCmd.func1
[15:14:02] info /home/runner/work/devpod/devpod/cmd/agent/workspace/up.go:52
[15:14:02] info github.com/spf13/cobra.(*Command).execute
[15:14:02] info /home/runner/work/devpod/devpod/vendor/github.com/spf13/cobra/command.go:985
[15:14:02] info github.com/spf13/cobra.(*Command).ExecuteC
[15:14:02] info /home/runner/work/devpod/devpod/vendor/github.com/spf13/cobra/command.go:1117
[15:14:02] info github.com/spf13/cobra.(*Command).Execute
[15:14:02] info /home/runner/work/devpod/devpod/vendor/github.com/spf13/cobra/command.go:1041
[15:14:02] info github.com/loft-sh/devpod/cmd.Execute
[15:14:02] info /home/runner/work/devpod/devpod/cmd/root.go:82
[15:14:02] info main.main
[15:14:02] info /home/runner/work/devpod/devpod/main.go:6
[15:14:02] info runtime.main
[15:14:02] info /home/runner/go/pkg/mod/golang.org/toolchain@v0.0.1-go1.23.5.linux-amd64/src/runtime/proc.go:272
[15:14:02] info runtime.goexit
[15:14:02] info /home/runner/go/pkg/mod/golang.org/toolchain@v0.0.1-go1.23.5.linux-amd64/src/runtime/asm_amd64.s:1700
[15:14:02] info error parsing workspace info: rerun as root: exit status 1
[15:14:02] debug Connection to SSH Server closed
[15:14:02] debug done inject
[15:14:02] debug done injecting
[15:14:02] debug Done creating devcontainer
[15:14:02] debug Done InjectAgentAndExecute
[15:14:02] debug Done executing ssh server helper command
[15:14:02] debug done exec
[15:14:03] fatal Process exited with status 1
run agent command
github.com/loft-sh/devpod/pkg/devcontainer/sshtunnel.ExecuteCommand.func2
        D:/a/devpod/devpod/pkg/devcontainer/sshtunnel/sshtunnel.go:129
runtime.goexit
        C:/Users/runneradmin/go/pkg/mod/golang.org/toolchain@v0.0.1-go1.23.5.windows-amd64/src/runtime/asm_amd64.s:1700

The important parts of the decvontainer.json:

{
  "name": "test",
  "dockerComposeFile": "compose.yaml",
  "service": "test",
  "workspaceFolder": "/",
  "features": {
    "ghcr.io/nils-geistmann/devcontainers-features/zsh:0": {},
    "ghcr.io/devcontainers/features/java:1": {},
    "ghcr.io/devcontainers/features/node:1": {
      "version": "22"
    },
    "ghcr.io/devcontainers/features/docker-in-docker:2": {
      "moby": false,
      "azureDnsAutoDetection": false
    }
  },
  "containerEnv": {
    "SHELL": "/bin/zsh"
  },
  "privileged": true
...

I tried different images for the VM (debian, ubuntu), different versions of DevPod (0.7.0-alpha, 0.6.15) ...

[arel]

I am seeing the same error trying to create a workspace with an SSH provider. (The workspace opens correctly with the local Docker provider, as well as opening the devcontainer natively in VS Code). Maybe it's a broader issue.