Comment by rwmj

It's still a problem for containers-in-VMs. You can in theory do something with either memory ballooning or (more modern) memory hotplugging, but the dance between the OS and the hypervisor takes a relatively long time to complete, and Linux just doesn't handle it well (eg. it inevitably places unmovable pages into newly reserved memory, meaning it can never be unplugged). We never found a good way to make applications running inside the VM able to transparently allocate memory. You can overprovision memory, and hypervisors won't actually allocate it on the host, and that's the best you can do, but this also has problems since Linux tends to allocate a bunch of fixed data structures proportional to the size of memory it thinks it has available.