The error message is coming from the Docker daemon, which means that it is not enough for you to have it in the PATH in the docker client’s shell. The daemon needs that executable to copy into the container and use as an init process /usr/bin is usually already in the path for every user as you had too, but if the Docker daemon can’t find it then it seems the variable was somehow overridden for the daemon. Maybe in the systemd unit’s config or docker-init is not in that folder. What is your operating system and how did you install Docker exactly?
Please share links if you have.
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