Reconnection attempts after "internal libpod error" when starting a project with Podman

Often after starting VS Code with Remote-Containers in a project using a Podman container, there are many reconnection attempts due to an internal libpod error, also included in the log below:

Error: timed out waiting for file /home/$HOST_USER/.local/share/containers/storage/overlay-containers/390f007317f11a0d1a4a9c6f92177711fa3ccde63c50e3a064a0d41fa30048df/userdata/6f0c6d8b91e8de7dd13bffb2544e957c60acc3b27147a6dc8b25a020735cf6c0/exit/390f007317f11a0d1a4a9c6f92177711fa3ccde63c50e3a064a0d41fa30048df: internal libpod error

Sometimes it will stop reconnecting and the project will successfully load in VS Code after only a few reconnection attempts, as in the log below, and sometimes it tries indefinitely. In that case I can shut down VS Code and start it again, and it may or may not work, and if not I can shut down VS Code again and start it again. Eventually it works. I don't know why it works sometimes and not other times. You can see from the log below that it takes about 7 seconds to cycle between attempts.

Other people have reported the same problem in https://github.com/microsoft/vscode-remote-release/issues/6685 and I'm creating a new issue as requested by @chrmarti in https://github.com/microsoft/vscode-remote-release/issues/6685#issuecomment-1241936152.

• VSCode Version: 1.71.0
• Local OS Version: Ubuntu 22.04 (on VMware Workstation Pro on Windows 10), using Podman v3.4.4 from Ubuntu repositories
• Remote OS Version: Ubuntu 22.04
• Remote Extension/Connection Type: Remote-Containers v0.251.0
• Logs: From the end of a container log after startup, in this case there is only one reconnection attempt and then the project loads successfully. $CONTAINER_USER and $HOST_USER have been added by me.

[5128 ms] *
* Visual Studio Code Server
*
* By using the software, you agree to
* the Visual Studio Code Server License Terms (https://aka.ms/vscode-server-license) and
* the Microsoft Privacy Statement (https://privacy.microsoft.com/en-US/privacystatement).
*
[5134 ms] Server bound to 127.0.0.1:38777 (IPv4)
Extension host agent listening on 38777

[5134 ms] Start: Run in container: echo 38777 >'/home/$CONTAINER_USER/.vscode-server/data/Machine/.devport-784b0177c56c607789f9638da7b6bf3230d47a8c'
[5135 ms] 
[5135 ms] 
[5135 ms] Port forwarding for container port 38777 starts listening on local port.
[5136 ms] Port forwarding local port 38777 to container port 38777
[5193 ms] userEnvProbe PATHs:
Probe:     '/usr/local/sbin:/usr/local/bin:/usr/sbin:/usr/bin:/sbin:/bin'
Container: '/usr/local/sbin:/usr/local/bin:/usr/sbin:/usr/bin:/sbin:/bin'
[5229 ms] Port forwarding connection from 42220 > 38777 > 38777 in the container.
[5230 ms] Start: Run in container: /home/$CONTAINER_USER/.vscode-server/bin/784b0177c56c607789f9638da7b6bf3230d47a8c/node -e 
[5530 ms] [13:13:29] Extension host agent started.
[5666 ms] Port forwarding 42220 > 38777 > 38777 stderr: Connection established
[5742 ms] Port forwarding connection from 42236 > 38777 > 38777 in the container.
[5742 ms] Start: Run in container: /home/$CONTAINER_USER/.vscode-server/bin/784b0177c56c607789f9638da7b6bf3230d47a8c/node -e 
[5849 ms] [13:13:29] ComputeTargetPlatform: linux-x64
[5916 ms] [13:13:29] [127.0.0.1][60ff6de4][ManagementConnection] New connection established.
[6057 ms] Port forwarding 42236 > 38777 > 38777 stderr: Connection established
[6424 ms] [13:13:30] [127.0.0.1][67f561c1][ExtensionHostConnection] New connection established.
[6430 ms] [13:13:30] [127.0.0.1][67f561c1][ExtensionHostConnection] <179> Launched Extension Host Process.
[12613 ms] Port forwarding 42220 > 38777 > 38777 stderr: Error: timed out waiting for file /home/$HOST_USER/.local/share/containers/storage/overlay-containers/390f007317f11a0d1a4a9c6f92177711fa3ccde63c50e3a064a0d41fa30048df/userdata/6f0c6d8b91e8de7dd13bffb2544e957c60acc3b27147a6dc8b25a020735cf6c0/exit/390f007317f11a0d1a4a9c6f92177711fa3ccde63c50e3a064a0d41fa30048df: internal libpod error
[12616 ms] Port forwarding 42220 > 38777 > 38777 terminated with code 255 and signal null.
[12617 ms] Port forwarding 42220 > 38777 > 38777: Local close
[12626 ms] Start: Reconnection attempt 1
[12626 ms] Start: Run: podman inspect --type container 390f007317f11a0d1a4a9c6f92177711fa3ccde63c50e3a064a0d41fa30048df
[12856 ms] Port forwarding connection from 47004 > 38777 > 38777 in the container.
[12857 ms] Start: Run in container: /home/$CONTAINER_USER/.vscode-server/bin/784b0177c56c607789f9638da7b6bf3230d47a8c/node -e 
[12971 ms] Port forwarding 47004 > 38777 > 38777 stderr: Connection established
[12984 ms] [13:13:36] [127.0.0.1][60ff6de4][ManagementConnection] The client has reconnected.
[14534 ms] Start: Run in container: cat /proc/233/environ

Steps to Reproduce:

1. Start VS Code with Remote-Containers on a project in a Podman container.
2. Sometimes it cycles through a few or many reconnection attempts, maybe eventually working, maybe not, as described above.