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No, it is not like Docker. You can treat an LXC container pretty much like a VM in most instances, including firewall rules. To answer the question, you can use fail2ban just like you had done in your VM, meaning you can run it inside the LXC container, where fail2ban can change the firewall rules of that container as it sees fit.
Thanks I appreciate your reply... I have a bit of concern about an unprivileged container having firewall limitations (as I might have read in the past this was...finicky), but I'm going to give it a shot.
I'm exclusively running unprivileged LXC containers and haven't had any issues regarding the firewall, neither with iptables nor nftables.
I've also been running nginx in an unprivileged LXC container. I haven't used fail2ban, specifically, but crowdsec has been working without issue.
You can mostly just treat an LXC like a normal VM.