Got it; note that inside a system container you can always run docker-in-docker using privileged containers (https://hub.docker.com/_/docker). That is, you don't need sysbox nesting in order to run more levels of docker nesting inside the system container. And those privileged containers would only be privileged within the system container, but not at host level.

Oh, that's cool. TIL. Thanks for taking the time to respond to something pretty far off in the weeds.