github repo mentions they use Docker in Docker and link to the docker.com article from 2013 where the -privileged flag introduced (with one dash?). So maybe the container you download is actually just a "wrapper" to setup a "real" kasm setup? But it's just my guess!

This is running a full desktop as a service system that uses docker in docker to provide multiple full remote desktops each with login etc.

That is only the all in one container solution geared to home server users.

The standard install uses no priv containers. https://www.kasmweb.com/downloads

I only mention the Linuxserver container because most Linux/Docker users do not want to pollute their base OS with stuff just to try it out.