I am having the same issue as well. I upgraded from 6.12.4 to 6.12.6, and how this container no longer works, which is a shame. I really like it.
2024-01-06 01:39:28,109 INFO Included extra file "/etc/supervisor.d/dbus.ini" during parsing
2024-01-06 01:39:28,109 INFO Included extra file "/etc/supervisor.d/desktop.ini" during parsing
2024-01-06 01:39:28,110 INFO Included extra file "/etc/supervisor.d/neko.ini" during parsing
2024-01-06 01:39:28,110 INFO Included extra file "/etc/supervisor.d/pulseaudio.ini" during parsing
2024-01-06 01:39:28,110 INFO Included extra file "/etc/supervisor.d/steam.ini" during parsing
2024-01-06 01:39:28,110 INFO Included extra file "/etc/supervisor.d/sunshine.ini" during parsing
2024-01-06 01:39:28,110 INFO Included extra file "/etc/supervisor.d/udev.ini" during parsing
2024-01-06 01:39:28,110 INFO Included extra file "/etc/supervisor.d/vnc-audio.ini" during parsing
2024-01-06 01:39:28,110 INFO Included extra file "/etc/supervisor.d/vnc.ini" during parsing
2024-01-06 01:39:28,110 INFO Included extra file "/etc/supervisor.d/wol-power-manager.ini" during parsing
2024-01-06 01:39:28,110 INFO Included extra file "/etc/supervisor.d/xorg.ini" during parsing
2024-01-06 01:39:28,110 INFO Included extra file "/etc/supervisor.d/xvfb.ini" during parsing
2024-01-06 01:39:28,110 INFO Set uid to user 0 succeeded
2024-01-06 01:39:28,112 INFO RPC interface 'supervisor' initialized
2024-01-06 01:39:28,112 CRIT Server 'unix_http_server' running without any HTTP authentication checking
2024-01-06 01:39:28,112 INFO supervisord started with pid 1
2024-01-06 01:39:29,114 INFO spawned: 'dbus' with pid 1026
2024-01-06 01:39:29,115 INFO spawned: 'udev' with pid 1027
2024-01-06 01:39:29,116 INFO spawned: 'xorg' with pid 1028
2024-01-06 01:39:29,116 INFO spawned: 'frontend' with pid 1029
2024-01-06 01:39:29,117 INFO spawned: 'pulseaudio' with pid 1030
2024-01-06 01:39:29,118 INFO spawned: 'x11vnc' with pid 1032
2024-01-06 01:39:29,119 INFO spawned: 'desktop' with pid 1035
2024-01-06 01:39:29,120 INFO spawned: 'sunshine' with pid 1039
PULSEAUDIO: Starting pulseaudio service
2024-01-06 01:39:29,128 INFO reaped unknown pid 1058 (exit status 0)
2024-01-06 01:39:30,124 INFO success: dbus entered RUNNING state, process has stayed up for > than 1 seconds (startsecs)
2024-01-06 01:39:30,124 INFO success: udev entered RUNNING state, process has stayed up for > than 1 seconds (startsecs)
2024-01-06 01:39:30,124 INFO success: xorg entered RUNNING state, process has stayed up for > than 1 seconds (startsecs)
2024-01-06 01:39:30,124 INFO success: frontend entered RUNNING state, process has stayed up for > than 1 seconds (startsecs)
2024-01-06 01:39:30,124 INFO success: pulseaudio entered RUNNING state, process has stayed up for > than 1 seconds (startsecs)
2024-01-06 01:39:30,124 INFO success: x11vnc entered RUNNING state, process has stayed up for > than 1 seconds (startsecs)
2024-01-06 01:39:30,124 INFO success: desktop entered RUNNING state, process has stayed up for > than 1 seconds (startsecs)
2024-01-06 01:39:30,124 INFO success: sunshine entered RUNNING state, process has stayed up for > than 1 seconds (startsecs)
2024-01-06 01:39:30,168 WARN exited: xorg (exit status 134; not expected)
2024-01-06 01:39:30,203 INFO spawned: 'xorg' with pid 1096
2024-01-06 01:39:30,231 WARN exited: xorg (exit status 134; not expected)
2024-01-06 01:39:32,144 INFO spawned: 'xorg' with pid 1124
2024-01-06 01:39:32,172 WARN exited: xorg (exit status 134; not expected)
2024-01-06 01:39:35,144 INFO spawned: 'xorg' with pid 1166
2024-01-06 01:39:35,171 WARN exited: xorg (exit status 134; not expected)
2024-01-06 01:39:38,174 INFO spawned: 'xorg' with pid 1208
2024-01-06 01:39:38,202 WARN exited: xorg (exit status 134; not expected)
2024-01-06 01:39:39,203 INFO gave up: xorg entered FATAL state, too many start retries too quickly
It seems like the issue is related to PULSEAUDIO? Or perhaps xorg?
I do not have an NVidia card installed, and use my iGPU, but I passthrough --device==/dev/dri and the container confirms it can see it.
I only connect over VNC, and use this container purely as a lancache for steam.