Yeah, it should work, note however that it’s not a full replacement yet.
It doesn’t work on top of btrfs, zfs, cephfs, … it only works currently if your container or the volume you’re passing into it sits on ext4, xfs or vfat.
For that reason, we’re not deprecating shiftfs yet in Ubuntu. We have @brauner working furiously to add support to the filesystems we care about but until then we’re in a hybrid approach where LXD detects whether a particular filesystem is functional and if not, falls back to shiftfs.