Hi there :)
I'm also facing this issue when trying to install K3S on LXC. I run Proxmox 6.3 with the following kernel:
root@rack01:~# uname -r
5.4.78-2-pve
I have created an LXC container from the official Ubuntu 20.10 LXC image with features keyctl=1,nesting=1. I try to start the k3s service...