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Hello!
Yes, we did something like this at host level to enable Docker usage for our LXC containers: https://du.nkel.dev/blog/2021-03-25_proxmox_docker/
I do not believe LXC is intended for that purpose. As the name implies, it's a container just like how Docker is also a type of container as well.
You will either need a provider who provides Hardware Based Virtualization (think KVM as the most common, HW-Xen, Vmware and etc are options too though). Or you could "risk" yourself with a OpenVZ provider who got the proper kernel installed.
By default nested virt is disabled, which you need for docker.
Especially if its a privileged container, you should not enable it.