I use ZFS for everything except podman/docker workloads.
I would recommend starting over with Incus and ZFS, then follow the directions in the video. There is another video somewhere about different storage options. ZFS seemed to win over LVM.
incus launch images:debian/12/cloud d1
incus storage create podman btrf
incus storage volume create podman tmp-btfs-volume
incus storage volume attach podman tmp-btfs-volume d1 /var/lib/containers
incus config set d1 security.nesting=true security.syscalls.intercept.mknod=true security.syscalls.intercept.setxattr=true
incus restart d1
incus exec d1 -- su -l debian
Then from inside your container:
sudo apt update
sudo apt install podman
podman run -it docker.io/ubuntu /bin/bash
All seems to work. I did not experience any performance issues. I have in the past before I learned about the special needs of these overlay filesystems.