Big “if”. There has never, in thirty years, been a Linux that lacked a user-to-root privilege escalation path. Running untrusted code in containers is the same as it’s ever been: totally unsafe. VMs are safer, or, minimally, ptrace sandboxes intercepting all syscalls.
One can write the same sentence about VMs. The most recent Xen escalation bug I can find in 5 minutes of Googling has a publication date of Jan 2020.
Emulating an entire machine, all of its diverse hardware, their bespoke protocols, and all the weirdness of the x86/amd64 ISA is fraught with peril. It is a large attack space. So too is the Linux kernel.
And frankly, inside the VM, half of us are running Linux anyways. I feel like for a lot of use cases, compromising the VM's guest OS (Linux) is enough to have a really bad day. Compromising the hypervisor? Bad, yes, but now it's AWS's problem.
There's more to containers, too, than just the security thing, and I think there are enough other advantages (I can more easily bin-pack services together; I can separate the FS and thus dependencies of unrelated components; I can more easily test them; etc.) that containers are worth it. Often and even on top of a VM. (My current work is with containers, and we run them on VMs.)
