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Privileged environments are those that can be deployed with a sidecar running Docker Daemon. If you install the Docker Client CLI on a privileged environment, the environment can then interact with the Docker Daemon.
Though privileged environments offer certain conveniences to a user's workflow, they can be exploited by malicious users and therefore present a security risk.
You may choose to enable privileged environments (by default, newly created environments lack this privilege).
If you modify an existing environment so that it becomes a privileged environment, you must rebuild it for the change to take effect.