Comment by torginus

Just looked it up - and the answer is 'baloon drivers', which are special drivers loaded by the guest OS, which can request and return unused pages to the host hypervisor.

Apparently docker for Mac and Windows uses these, but in practice, docker containers tend to grow quite large in terms of memory, so not quite sure how well it works in practice, its certainly overallocates compared to running docker natively on a Linux host.