What are the issues you see? My team all use Docker with M1 Macs and all seems to work fine, if a little slow.
With that said if you're doing mostly backend stuff in Go/Python/Ruby etc it's quite good. Most of my complaints are from full-stack development.
The other upside of being fully containerized - even for FE stuff - is that you side-step having to worry about having any sort of "local" dev environment configured beyond Docker/Podman/etc and some environment variables set. It makes onboarding new developers a breeze and eliminates "Weird, works locally on my machine!" types of issues.
Lots to do to combat this, like: not sharing the volume with the host (vscode dev containers recommends this)