Docker is missing a bunch of features that make some software work, which is why you can't run Docker inside Docker by default. Instead of dropping from containers all the way down to hardware virtualization, Sysbox is "augmenting" containers with the missing features by simulating them in userland. That gives you all the power of a VM, without any of the downside of slow start-up speed, provisioning blocks of memory, not being able to run them on EC2, etcetc.
It reminds me a bit of user-mode Linux [0], weirdly. There's something kinda interesting about simulating a bunch of the kernel in userland.