The same configuration works if I manually install k3s in ubuntu. I noticed that the start command of containerd is different. In k3s it's

containerd -c /var/lib/rancher/k3s/agent/etc/containerd/config.toml -a /run/k3s/containerd/containerd.sock --state /run/k3s/containerd --root /var/lib/rancher/k3s/agent/containerd

You might find this comment helpful: https://github.com/rancher-sandbox/rancher-desktop/issues/721#issuecomment-997216282. Also, the issue in general may be helpful. Let me know how it goes