EDIT: This was appearently reported already here. Keeping this post for the archive.
% toolbox create
Created container: fedora-toolbox-31
Enter with: toolbox enter
% toolbox enter
toolbox: failed to start container fedora-toolbox-31
% podman --log-level debug start fedora-toolbox-31
DEBU[0000] using conmon: "/usr/bin/conmon"
DEBU[0000] Initializing boltdb state at /var/home/me/.local/share/containers/storage/libpod/bolt_state.db
DEBU[0000] Using graph driver overlay
DEBU[0000] Using graph root /var/home/me/.local/share/containers/storage
DEBU[0000] Using run root /tmp/1000
DEBU[0000] Using static dir /var/home/me/.local/share/containers/storage/libpod
DEBU[0000] Using tmp dir /run/user/1000/libpod/tmp
DEBU[0000] Using volume path /var/home/me/.local/share/containers/storage/volumes
DEBU[0000] Set libpod namespace to ""
DEBU[0000] [graphdriver] trying provided driver "overlay"
DEBU[0000] overlay: mount_program=/usr/bin/fuse-overlayfs
DEBU[0000] backingFs=extfs, projectQuotaSupported=false, useNativeDiff=false, usingMetacopy=false
DEBU[0000] Initializing event backend journald
DEBU[0000] using runtime "/usr/bin/runc"
DEBU[0000] using runtime "/usr/bin/crun"
INFO[0000] running as rootless
DEBU[0000] using conmon: "/usr/bin/conmon"
DEBU[0000] Initializing boltdb state at /var/home/me/.local/share/containers/storage/libpod/bolt_state.db
DEBU[0000] Using graph driver overlay
DEBU[0000] Using graph root /var/home/me/.local/share/containers/storage
DEBU[0000] Using run root /tmp/1000
DEBU[0000] Using static dir /var/home/me/.local/share/containers/storage/libpod
DEBU[0000] Using tmp dir /run/user/1000/libpod/tmp
DEBU[0000] Using volume path /var/home/me/.local/share/containers/storage/volumes
DEBU[0000] Set libpod namespace to ""
DEBU[0000] Initializing event backend journald
DEBU[0000] using runtime "/usr/bin/runc"
DEBU[0000] using runtime "/usr/bin/crun"
DEBU[0000] [graphdriver] trying provided driver "overlay"
DEBU[0000] overlay: mount_program=/usr/bin/fuse-overlayfs
DEBU[0000] backingFs=extfs, projectQuotaSupported=false, useNativeDiff=false, usingMetacopy=false
DEBU[0000] overlay: mount_data=lowerdir=/var/home/me/.local/share/containers/storage/overlay/l/Q33TB5UUFEL5EDAKMV4I3SEQOK:/var/home/me/.local/share/containers/storage/overlay/l/VLEHDXKRPCZDYH652W62R25VBP,upperdir=/var/home/me/.local/share/containers/storage/overlay/4d4905a1fadd0845e03936e7a8fe5775b67327d3ee0ac6c26dcfeeaa8f574796/diff,workdir=/var/home/me/.local/share/containers/storage/overlay/4d4905a1fadd0845e03936e7a8fe5775b67327d3ee0ac6c26dcfeeaa8f574796/work,context="system_u:object_r:container_file_t:s0:c388,c462"
DEBU[0000] mounted container "5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36" at "/var/home/me/.local/share/containers/storage/overlay/4d4905a1fadd0845e03936e7a8fe5775b67327d3ee0ac6c26dcfeeaa8f574796/merged"
DEBU[0000] Created root filesystem for container 5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36 at /var/home/me/.local/share/containers/storage/overlay/4d4905a1fadd0845e03936e7a8fe5775b67327d3ee0ac6c26dcfeeaa8f574796/merged
DEBU[0000] /etc/system-fips does not exist on host, not mounting FIPS mode secret
DEBU[0000] Setting CGroups for container 5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36 to user.slice:libpod:5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36
DEBU[0000] set root propagation to "rslave"
DEBU[0000] Created OCI spec for container 5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36 at /var/home/me/.local/share/containers/storage/overlay-containers/5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36/userdata/config.json
DEBU[0000] /usr/bin/conmon messages will be logged to syslog
DEBU[0000] running conmon: /usr/bin/conmon args="[--api-version 1 -s -c 5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36 -u 5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36 -r /usr/bin/crun -b /var/home/me/.local/share/containers/storage/overlay-containers/5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36/userdata -p /tmp/1000/overlay-containers/5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36/userdata/pidfile -l k8s-file:/var/home/me/.local/share/containers/storage/overlay-containers/5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36/userdata/ctr.log --exit-dir /run/user/1000/libpod/tmp/exits --socket-dir-path /run/user/1000/libpod/tmp/socket --log-level debug --syslog --conmon-pidfile /tmp/1000/overlay-containers/5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36/userdata/conmon.pid --exit-command /usr/bin/podman --exit-command-arg --root --exit-command-arg /var/home/me/.local/share/containers/storage --exit-command-arg --runroot --exit-command-arg /tmp/1000 --exit-command-arg --log-level --exit-command-arg error --exit-command-arg --cgroup-manager --exit-command-arg systemd --exit-command-arg --tmpdir --exit-command-arg /run/user/1000/libpod/tmp --exit-command-arg --runtime --exit-command-arg crun --exit-command-arg --storage-driver --exit-command-arg overlay --exit-command-arg --storage-opt --exit-command-arg overlay.mount_program=/usr/bin/fuse-overlayfs --exit-command-arg --events-backend --exit-command-arg journald --exit-command-arg container --exit-command-arg cleanup --exit-command-arg 5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36]"
[conmon:d]: failed to write to /proc/self/oom_score_adj: Permission denied
DEBU[0000] Received: -1
DEBU[0000] Cleaning up container 5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36
DEBU[0000] Network is already cleaned up, skipping...
DEBU[0000] unmounted container "5956e20bfc9d5bee8f0b0dfe8bf2eae7cff20eabf9b1ae841b75c7e4949aac36"
ERRO[0000] unable to start container "fedora-toolbox-31": creating file '/var/home/me/.local/share/containers/storage/overlay/4d4905a1fadd0845e03936e7a8fe5775b67327d3ee0ac6c26dcfeeaa8f574796/merged/media': Is a directory: OCI runtime error
Also all my containers don’t work anymore.