That cannot be true. You need to tell the kernel about the namespaces, cgroups, and the new root. Otherwise it's not a container, and there is no reason or mechanism for a child proc to respect it. And if you let any old unprivileged process do this, you open up security problems.

I've done this for practical use cases, like running a container inside another container that didn't have root privileges. It works fine for that use case. I'm not worried about restricting access of the process because it's already within a larger sandbox, I'm usually just trying to execute the command within the child container's filesystem (e.g. some vendor/partner software they ship as a container image).

I don't know why you're so shocked by this? This is all very basic use of the OCI spec.