GitLab LXC: can't upgrade to 13.8

[voarsh]

Currently I am running GitLab CE in an LXC (13.4.7) and I cannot upgrade to 13.8

There was an error running gitlab-ctl reconfigure:

execute[reload all sysctl conf] (package::sysctl line 18) had an error: Mixlib::ShellOut::ShellCommandFailed: Expected process to exit with [0], but received '255'
---- Begin output of sysctl -e --system ----
STDOUT: * Applying /etc/sysctl.d/10-hardening.conf ...
net.ipv4.conf.default.rp_filter = 1
net.ipv4.conf.all.rp_filter = 1
net.ipv4.tcp_syncookies = 1
net.ipv4.conf.all.forwarding = 0
net.ipv6.conf.all.forwarding = 0
net.ipv4.conf.all.accept_redirects = 0
net.ipv4.conf.default.accept_redirects = 0
net.ipv6.conf.all.accept_redirects = 0
net.ipv6.conf.default.accept_redirects = 0
net.ipv4.conf.all.send_redirects = 0
net.ipv4.conf.default.send_redirects = 0
net.ipv4.conf.all.accept_source_route = 0
net.ipv6.conf.all.accept_source_route = 0
net.ipv4.conf.all.log_martians = 1
net.ipv4.conf.default.log_martians = 1
net.ipv4.tcp_timestamps = 0
* Applying /etc/sysctl.d/90-omnibus-gitlab-kernel.sem.conf ...
* Applying /etc/sysctl.d/90-omnibus-gitlab-kernel.shmall.conf ...
* Applying /etc/sysctl.d/90-omnibus-gitlab-kernel.shmmax.conf ...
* Applying /etc/sysctl.d/90-omnibus-gitlab-net.core.somaxconn.conf ...
net.core.somaxconn = 1024
* Applying /etc/sysctl.d/99-sysctl.conf ...
net.ipv4.tcp_timestamps = 0
* Applying /etc/sysctl.d/protect-links.conf ...
* Applying /etc/sysctl.conf ...
net.ipv4.tcp_timestamps = 0
STDERR: sysctl: setting key "fs.suid_dumpable": Read-only file system
sysctl: setting key "kernel.core_uses_pid": Read-only file system
sysctl: setting key "kernel.dmesg_restrict": Read-only file system
sysctl: setting key "kernel.kptr_restrict": Read-only file system
sysctl: setting key "kernel.sysrq": Read-only file system
sysctl: setting key "kernel.sem": Read-only file system
sysctl: setting key "kernel.shmall": Read-only file system
sysctl: setting key "kernel.shmmax": Read-only file system
sysctl: setting key "kernel.printk": Read-only file system
sysctl: setting key "fs.protected_hardlinks": Read-only file system
sysctl: setting key "fs.protected_symlinks": Read-only file system
sysctl: setting key "kernel.printk": Read-only file system
---- End output of sysctl -e --system ----
Ran sysctl -e --system returned 255


Warnings:
Environment variable LC_ALL specifies a non-UTF-8 locale. GitLab requires UTF-8 encoding to function properly. Please check your locale settings.

Running handlers complete
Chef Infra Client failed. 64 resources updated in 02 minutes 47 seconds

Warnings:
Environment variable LC_ALL specifies a non-UTF-8 locale. GitLab requires UTF-8 encoding to function properly. Please check your locale settings.

Running reconfigure: NOT OK
== Fatal error ==
Something went wrong during final reconfiguration, please check the output
== Reverting ==
ok: down: postgresql: 0s, normally up
Symlink correct version of binaries: OK
ok: run: postgresql: (pid 38071) 1s
== Reverted ==
== Reverted to 11.11. Please check output for what went wrong ==
Toggling deploy page:rm -f /opt/gitlab/embedded/service/gitlab-rails/public/index.html
Toggling deploy page: OK
Toggling services:ok: run: alertmanager: (pid 38088) 0s
ok: run: gitaly: (pid 38095) 0s
ok: run: gitlab-exporter: (pid 38004) 8s
ok: run: grafana: (pid 38117) 1s
ok: run: logrotate: (pid 38132) 0s
ok: run: node-exporter: (pid 38143) 0s
ok: run: postgres-exporter: (pid 38007) 9s
ok: run: prometheus: (pid 38168) 0s
ok: run: redis-exporter: (pid 38171) 0s
ok: run: sidekiq: (pid 38174) 0s
Toggling services: OK
Checking if a newer PostgreSQL version is available and attempting automatic upgrade to it: NOT OK
Error ensuring PostgreSQL is updated. Please check the logs
dpkg: error processing package gitlab-ce (--configure):
 installed gitlab-ce package post-installation script subprocess returned error exit status 1
Errors were encountered while processing:
 gitlab-ce
[master 6efd4f2] committing changes in /etc made by "apt-get install -y gitlab-ce=13.8.8-ce.0"
 4 files changed, 6 insertions(+)
 create mode 100644 gitlab/config_backup/gitlab_config_1674331035_2023_01_21.tar
 create mode 120000 sysctl.d/90-omnibus-gitlab-net.core.somaxconn.conf
Enumerating objects: 1327, done.
Counting objects: 100% (1327/1327), done.
Delta compression using up to 32 threads
Compressing objects: 100% (810/810), done.
Writing objects: 100% (1327/1327), done.
Total 1327 (delta 155), reused 1312 (delta 148)
E: Sub-process /usr/bin/dpkg returned an error code (1)

It is not an unprivileged container.... and the upgrade process is updating PostgreSQL to V12 (from 11) I believe....
I saw something about this on Google, regarding updating in Docker (because you can install GitLab on Docker as well)..... and the workaround was exiting the update script!?

Any ideas for me? Or do I need to do the painful task of migrating this instance to a full fledged VM?