I am using LXC 4.0.2 on about 25 systems without problems. None of these hosts does nested virtualization, though.
Nested virtualization and cgroups vs cgroups2 is a *highly* complex issue. Can you reproduce this problem outside of your Docker setup? I wouldn't like to see LXC dropped for Bullseye, just due to some hiccup thats is not relevant for anybody except the few guys running LXC within Docker. Regards Harri