Nested LXD containers with Docker cannot run containers

[zicklag]

Looks like somebody else had a similar problem solved by setting security.nesting=true:

Having trouble using docker

Oops, sorry, this article needs to be slightly tweaked as its last update wasn’t quite correct. You want: “lxc launch ubuntu:16.04 -c security.nesting=true” so that nesting is allowed for the container.

Edit: Oh, it looks like that is already in your configuration from your post above.