In the kind of setup you'd use with mutagen your dev tools and compilers are typically inside the container, while your code and editor are outside the container and being synced inside the container on every change. If the container is running on another machine/cloud service then yeah it could be that your compiler is running outside your machine. But much more likely it's still running as a container on your machine. The typical use case for this is making your dev environment accessible to anyone, just send them a dockerfile and they can almost perfectly reproduce it and get going with building your software (vs. having to laboriously setup the exact version of each dev tool and compiler you use).
