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Nesting=1. This isn't about virtualizing inside the container, it allows internal resources to access parent resources.
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You should only need the cgroup2 entries, but they should be pointing to the correct devices:
- cgroup2 entries to allow rwm access to the correct device
- /dev/dri dir and file entries that specify bind,optional,create
Nvidia example, but quicksync is similar:
lxc.cgroup2.devices.allow: c 226:0 rwm
lxc.cgroup2.devices.allow: c 226:128 rwm
lxc.mount.entry: /dev/dri dev/dri none bind,optional,create=dir
lxc.mount.entry: /dev/dri/renderD128 dev/renderD128 none bind,optional,create=file