Great question — answering as the UphillTech team:
It was not allowed to mount overlayfs within unprivileged user namespace up until and including kernel version v5.10. Not sure but if you can try a bind mount of the overlayfs into the user namespace. Starting with kernel 5.11 however, the appropriate support has been added and you can now finally use them.
Full answer by shashank: https://unix.stackexchange.com/a/493864 (CC BY-SA 4.0).
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