A quick note, have a look to verify whether shiftfs is enabled. It makes launching container much faster, but may break Docker. Trying out `shiftfs`
I did not see any reference to the host OS. Shall I assume it is Ubuntu 18.04 LTS?
To run Docker in a container, you would need security.nesting: true. It should not be necessary to also enable security.privileged or disable AppArmor.
There is an issue with Docker not getting the FS it needs, depending on the storage driver (dir, ZFS, btrfs). I recollect that the best option is btrfs for Docker, as the container can use something better then overlayfs. dir is the slowest of all in the lifecycle of a container, the other two support copy-on-write, which I think it necessary for kubernetes.