When you upgrade Server1 to Windows Server 2022, you are running a newer version of the operating system than the one that the container (which is based on a Windows Server 2019 image) was built for. Containers running in process isolation mode must use a base image that matches the host OS version or be very close. Since the base image for Container1 is built on Windows Server 2019 and the host is now Windows Server 2022, process isolation would not work without rebuilding the image.
To minimize administrative effort, you can run the container in Hyper-V isolation mode, which provides compatibility by allowing containers to run with a different kernel version than the host.
Hyper-V isolation creates a lightweight virtual machine for each container, allowing it to run in its own isolated environment.