I believe you're looking for Era. It uses libkrun for local microVM isolation and was built specifically to solve the "LLM hallucinated a destructive bash command" problem without the overhead of a massive VM.
Another one that handles this gracefully is Yolobox, which uses rootless Podman. Both are actively maintained and cut through the noise of the thousands of generic wrapper repos out there right now.
Era links to https://github.com/smol-machines/smolvm now
Era is a bit of a generic name. Just found another podman one with https://github.com/thomaspeklak/agent-sandbox
just found era it's deprecated, so it wasn't that.