Not misunderstanding, just not the full picture. Proxmox can do VMs, but LXCs are different thing.

LXCs are a 'container' and have some requirements that might be frustrating sporadically, but they are much lighter. They'll present like you'd expect from a VM (Their own operating system/shell/etc) but resources are mostly shared across LXCs on a host. Overhead isn't gone, but drastically reduced. Personal experience obviously, but it's never been something I've had to seriously consider on an LXC.