neovim not working properly using devcontainer exec

[MartinLoeper]

I am trying to rebuild the vscode remote containers feature for nvim and run into the following issue:

• nvim does not refresh the view correctly when running it using the devcontainer cli as follows: devcontainer exec --workspace-folder . zsh -c "D=\$(pwd) && cd ~/dotfiles && devbox run nvim \$D"
• using docker exec directly works though: docker exec --user vscode -it reverent_neumann zsh -c "D=\$(pwd) && cd ~/dotfiles && devbox run nvim $D"

Has someone an idea why this might happen? I read about the $TERM variable which might cause this weird behavior.

Here is a screenshot that visualizes the issue. I use wezterm as terminal.

This is how it should look like:

Possibly related: https://github.com/loft-sh/devpod/issues/1187