VS Code devcontainers have been working fine for me with rootless podman in Fedora for over a year now. The one adjustment I had to make was manually provide args to podman to mount the workspace volume:

  "runArgs": [
    "--userns=keep-id",
    "--volume=${localWorkspaceFolder}:/workspaces/${localWorkspaceFolderBasename}:Z"
  ],

I'm not sure if this is still necessary, or if it's necessary on all platforms.