I see differences in the way environment variables are injected depending on if

nerdctl run

is used vs

nerdctl compose up

with an

env-file

is used. This is on RD 1.6.0 Mac M1 If you have this in a

.env

file:

ZZ='.env file $test pound # and more'
ZZ_NOQUOTES=.env file $test pound # and more

nerdctl run --rm --env-file ./.env  busybox /bin/sh -c set

# looks like it adds single quotes

ZZ=''"'"'.env file $test pound # and more'"'"
ZZ_NOQUOTES='.env file $test pound # and more'

But if you you

nerdctl compose up

and use that file the single quotes work as the spec says they should (truncating the second value since # is a comment)

ZZ='.env file $test pound # and more'
ZZ_NOQUOTES='.env file  pound'

The compose file:

services:
  busybox:
    image: busybox
    env_file:
      - .env
    command: ['sh', '-c', 'set']

Could you file a bug at Issues · containerd/nerdctl, as I expect this to be an issue inside

nerdctl

and not Rancher Desktop?