I'm not sure how else to respond to "let's reinvent a complete Linux distribution because we've written a 20 line auto-updater".
This would have made sense to me a decade ago, but back then I just wouldn't have understood the amount of work involved. You simply cannot produce a fully generalized container OS without producing a fully generalized OS.
That aside, I actually like the central idea of a better approach to managing/updating a large group of host machines. I just don't think it warrants yet another bikeshedded support/security/certifiability nightmare (and lets face it, this is bikeshedding, there's absolutely no value in the core claim of "it's just Linux", but it gives unfettered license to reinvent the same old wheels all over yet again).