It could be useful if updating is a pain point.
In this case, they may also consider Podman, as it has excellent systemd integration[1] including rudimentary container orchestration and the ability to auto-update containers and Kubernetes-style pods installed as systemd units. I've run Pihole under Fedora CoreOS this way for several years without touching a single thing to update the OS or Pihole.
[1] https://docs.podman.io/en/latest/markdown/podman-systemd.uni...
TL; DR you're right. We are aware options like Podman and systemd-nspawn (check it out if you don't know). They are just overkill.
If you don't need the layers of Docker and server pull-push, it is just overhead. We just fetch a single cryptographically signed squashfs file and execute the program in it with limited FS and separate namespaces.