I guess it will label the containers it started, but from the output of ps -eZ, I don't see any difference.
For example, the container etcd has the same domain, no matter the daemon is with and without this option:
system_u:system_r:container_runtime_t:s0 16212 ? 00:00:00 dnsmasq-nanny
But it does prevent my container(k8s-dns-dnsmasq-nanny-amd64:1.14.8) from starting up and the deny logs shows access to /etc/localtime and /usr/sbin/dnsmasq are denied. I think these are files inside container filesystem. How can I write SELinux policy to allow access inside container file system?