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You can still use VMs and do containers in there. That's what I do, makes separating different services very easy.
This is what I currently do with non-specialized services that require Docker. I have one container, which runs Docker Engine, and I throw everything on there, and then if I have a specialized container that needs Docker, I will still run its own CT. But then I use Docker Agent, So I can use one administration panel.
It's just annoying because I would rather just remove Docker from the situation because when you're running Proxmox, you're essentially running a virtualized system in a virtualized system because you have Proxmox, which is the bare bones running a virtualized environment for the container, which is then running a virtualized environment for the Docker container.
Neither Linux containers nor Docker containers are virtualized.
I think we might have a different definition of Virtualized and containers. I use IBM's and Comptias definitions.
IBM's definition is
The IBM page themselves acknowledges that containers are virtualization on their Containers vs Virtual Machines page. I call virtualization as an abstraction layer between the hardware and the system being run.
Comptia's definition of containers would be valid as well. Which states that containers are a virtualization layer that operates at the OS level and isolates the OS from the file system. Whereas virtual machines are an abstraction layer between the hardware and the OS.
I grew this terminology from my comptia networking+ book from 12 years ago though, which classifies Virtualization as "a process that adds a layer of abstraction between hardware and the system" which is a dated term since OS level virtualization such as Containers wasn't really a thing then.