creating the workspace is based on docker but within the workspace you're free to do whatever you want, no need to use docker-compose there

But then how is this so different from running "docker-compose" and then do whatever you want withing the container? Is the difference just that they provide ready-made Docker images for certain environments so that you don't have to create your own? Can I get the same images on Dockerhub then?

+1, trying to put it my head (disclaimer - I'm a rare user of local docker, as not being developer), hoping to get some insights which may be helpful in better setup for dev team

Partially, yep. The more important part is that these Docker images run on a remote machine