Because in order to exploit this, you have to have direct access to the computer. Either through malicious usb device, or by exploiting some supply chain or a known piece of software that will be willingly or automatically installed, and furthermore you need to be able to essentially run arbitrary terminal commands, which is a huge breach of isolation in that software.

If an attacker manages to do all that, its already bad news for you. Escalation to root with this is the least of your worries at that point.

Like someone else below posted, https://xkcd.com/1200/

People need to understand what the vulnerability actually is before freaking out about it.

You are assuming that LPE only applies to the user that holds all the sensitive stuff. But it also applies to users created specifically for isolation. Without LPE they would not have access to anything important even if they were compromised.

So a threat actor buys access to a managed kubernetes service, or other linux-based shared hosting platform, and now they have access to the computer.

Hell, GitHub Actions would do.

Is there any service that relies on Linux user separation or containers to separate different user accounts? I’m pretty sure you’re not supposed to do that and the proper way is to run different instances in virtual machines.

Basically every shared webhost that uses cPanel works like this. The security mechanism they use is called CageFS (https://cloudlinux.com/getting-started-with-cloudlinux-os/41...), which makes it so users can't see other users, but it's not like a VM or something.

Right, you're not supposed to do that...