Yeah, that's because you're using LXD 4.23 which has the older LXCFS and
doesn't trigger the apparmor warning message which then confuses
everything else (per previous comment).

If you `snap install lxd --channel=latest/edge`, you should start getting the 
broken behavior.
Note however that we did fix LXCFS so that broken behavior on an apparmor 
warning will soon go away as the warning in question will no longer be issued 
by apparmor.

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https://bugs.launchpad.net/bugs/1964636

Title:
  Incorrect handling of apparmor `bpf` capability

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