- Make sure you shut down unused containers
- Make sure in the dev-container everything got shutdown completely when restarting
- Make sure your limit is high enough in the container
- Make sure your limit is high enough in the host as watches in the container are counted towards the hosts limit.
But yes, this is a known limitation of about all software that makes excessive use of watches. Even your git-gui, an editor in the host or container, all count towards this limit.
A short term solution is to simply edit the file, a long term solution is to create a startup script which increases the limit during boot time. How to do this exactly depends on your hosts distribution. For the container its a matter of putting
RUN echo 1000000 > /prox/sys/fx/inotify/max_user_watches