What is the path resolution context of `onCreateCommand` when using Docker outside of Docker (DooD)?

[krave1986]

Question / Clarification Request

I have a devcontainer setup using Docker Compose with the docker-outside-of-docker feature. My devcontainer.json is as follows:

{
    "name": "hanhanmap-frontend",
    "dockerComposeFile": "compose.yaml",
    "service": "hanhanmap-frontend",
    "workspaceFolder": "/workspace/frontend",
    "onCreateCommand": "docker compose -f .devcontainer/compose.yaml run --rm code-sync",
    "features": {
        "ghcr.io/devcontainers/features/docker-outside-of-docker": {}
    }
}

The dev container is based on Docker Compose, with no bind mounts — only a named volume:

services:
  hanhanmap-frontend:
    build:
      context: .
      dockerfile: Dockerfile
    volumes:
      - volume-of-hanhan:/workspace
    working_dir: /workspace/frontend
    command: sleep infinity
volumes:
  volume-of-hanhan:

The onCreateCommand runs successfully — docker compose -f .devcontainer/compose.yaml run --rm code-sync completes without errors.

However, this raises a question I cannot answer with confidence:

The path .devcontainer/compose.yaml is passed to docker compose -f. Since the docker CLI inside the container communicates with the host's Docker daemon via the socket (DooD), and since .devcontever/compose.yaml does not exist inside the container (no bind mount), how is this path resolved?

Possible explanations:

1. The docker compose -f <path> resolves the path in the host's filesystem context, not the container's — because the command is ultimately dispatched to the host daemon.
2. The Dev Containers CLI somehow makes .devcontainer/ available inside the container before onCreateCommand runs.
3. Something else entirely.

What I'd like to understand:

• What is the working directory and filesystem context when onCreateCommand runs a docker compose command via DooD?
• Is this behavior defined in the Dev Container spec, or is it an implementation detail of the VS Code Dev Containers extension?
• Can I rely on host-side paths being resolvable from within onCreateCommand when using DooD?

Thank you!