Maybe not the right answer for you since I am not VPS-based but basement-rack-based.

I would choose Debian + docker for whatever available. Just make sure you have enough space for those. And probably even enough CPU.

To me it makes sense to separate them but some would argue otherwise with Docker/podman/container. Remember, Docker however by default is root.

The one I would actually do at home is Docker on a unpriviledged LXC (Proxmox) to make sure that there is no real root processes running

Cheers

Ubuntu Server, Debian, or Rocky Linux will save you a lot of headaches.

Most software is designed with these major distros in mind and using something more obscure will just cause problems later on when you realise that there are no guides written for it by the software vendor. Fixing broken software gets old really fast especially when it causes your stuff to break when you're actually trying to use it.

Debian is my vote, that's what I run on all of my servers, containers, and VMs.