can lbu use the data drive?

So - I'm trying to work out the "right" way to set up a farm of alpine VMs under vmware (intended to be docker hosts). What I am trying to do is boot from ISO, and save the state (root password, keys, etc) on the disk, along with the docker images and containers. So I boot, setup data disk, and try to do lbu, but it seems to want a dedicated drive?

I guess the first question I have is - is this even sane? My goal is read-only boot media, easy to swap out when I need to upgrade things. If there is some glaring flaw in that plan waiting to bite me, please feel free to let me know.

Maybe I should just do 2 partitions, one for lbu and one for data? I kinda wanted to avoid that for reasons of minimal complexity. (that's also why I am avoiding virtual usb or floppy).

Or maybe there is some way to get lbu to use a filesystem.

Anyway - I'm not an evil genius, someone must have thought about this before and either knows the right way to do it, or can point out the horrible fate I am narrowly missing. Any advice is appreciated. If there is a page that covers this, a link to it would be totally awesome.