I don't run much on the root OS of my dev machine, basically everything is in a container or VM of some kind, but that's more so that I can reproduce my environment by copying a VMDK than in an effort to limit what the container can do to itself and data it has access to. Yeah, even with root access to a VM guest, an attacker they won't get my password manager, personal credit card, socials, etc. that I only use from the host OS... But they'll get everything that the container contains or has access to, which is often a lot of data!
Of course, this is not a real defense on its own, its just good practice to limit blast radius, much like not giving everybody admin rights.
Even a properly containerized app will still have these things, because you need things like environment variables (that contain passwords, api keys, etc) for your app to function.
Really? What if your application needs to write to Github?
That's a lot of work though, and increases the difference between your local dev environment and prod.