github repo mentions they use Docker in Docker and link to the docker.com article from 2013 where the -privileged flag introduced (with one dash?). So maybe the container you download is actually just a "wrapper" to setup a "real" kasm setup? But it's just my guess!
The standard install uses no priv containers. https://www.kasmweb.com/downloads
I only mention the Linuxserver container because most Linux/Docker users do not want to pollute their base OS with stuff just to try it out.