For example, with containers on AWS ECS:

https://docs.aws.amazon.com/AmazonECS/latest/userguide/task-...

So with environment variables.

I had supposed they would create a derived container and put it in a file somewhere.

my understanding is that the major public clouds operate Public Key Infrastructure on end users' behalf. It feels like magic because there are large teams of very smart and capable people making it feel like magic.