Yes that's right, the process is:
- clone the repo with git
- Open Cursor (or vscode) locally, click "open remote window" little blue button at the bottom left of the screen
- Navigate to the folder you cloned and press open
- IDE will recognise that there's a .devcontainer inside the folder and pop a dialog saying "Re-open in container", click that. If this dialog doesn't show press "Shift+Ctrl+P" and type "Rebuild" and a menu option "Dev containers: Rebuild and re-open in container" will show up, select that.
- The docker container will be built and you'll be dropped inside it, with the appropriate folder mounts happening automatically. Now when you open a terminal inside the IDE it's a terminal inside the container.