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Track upstream OpenShell#1107: /etc/hosts injection for policy-allowed hostnames #40

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@durandom

Upstream: NVIDIA/OpenShell#1107

Inside the sandbox, /etc/resolv.conf points to an unreachable nameserver (inner netns inherits the host's resolver at 10.89.0.1, which is unreachable). This means DNS-dependent tools timeout instead of failing fast, and all network access must go through the L7 proxy.

The upstream fix would inject /etc/hosts entries for policy-allowed hostnames, letting non-HTTP protocols (git://, ssh://) work without DNS.

Impact: Would eliminate the need for explicit httpProxy/httpsProxy workarounds in .yarnrc.yml and improve sandbox networking reliability.

Migrated from docs/known-issues.md

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