There's no specific documentation for this because it's really no different than any other Linux system. Maybe with the one exception that root can do slightly less damage than normal.
So all the usual recommendations about limiting the number of open ports, setting up firewall, restricting remote shell, ... that you would normally have for a Linux VM or physical machine equally apply to containers.
The section of security.md that you found about the password authentication is to prevent password brute forcing of the LXD API itself. If you unset the core.trust_password property after all your client certificates have been added to LXD, then nobody can brute force it.