Essentially the ISP will be trying to lease the same IP to 2 devices at once.

But you only have one connection from your ISP, so I don’t see how this is possible.

Any desktop computer that has enough SATA ports and space in the case for your desired configuration, that is from this last decade, should work fine.

Dell rackmount servers are power hungry and loud.

TLDR:is a 4 Bay chassis provide sufficient protection for freenas ZFS with total ~ 10TB usable storage? or do I need 8 Bay?

There is no requirement of a particular number of disks for ZFS. You can run ZFS on a single disk.

But for TRUENAS (FreeNAS name has been dead for years now), you will dedicate one entire disk to the OS, so keep it small (just shove a small SSD in the case somewhere), and then decide how many disks you need to buy to accommodate the amount of storage you need. Then decide if you ever want to expand that capacity. THAT should determine what kind of case you buy.

Is a dell R320 or R510 sensible in terms of power efficiency for freenas?

Dear God, no.

Portainer isn’t a file browser or text editor.

What exactly are you trying to edit?

Just drop the compose contents into portainer stack.

Edit the paths and environment variables

That’s not what Docker is intended for

I mount the NFS on the host to a path and use the path. Been working fine for YEARS.

Did you add a volume to your NGINX Proxy Manager? Unless you have persistent data, it’s going to reset every time you reboot or update NPM.

Use a volume or bind mount.

Should I be worried about sensitive data being leaked?

If you’re not exposing any services over the internet…no?

Can you elaborate on this a bit more because I’m trying to figure out where you would arrive at that conclusion that it would be possible. Perhaps there’s something in your setup that you haven’t explained fully.

Could it be as simple as grabbing a docker image and running the VM inside a container?

That’s not how docker or VMs work.