Settings > Permalinks – mod_rewrite ineffective if expression not preceded by /index.php/

SOLVED:

This is Apache2 on Debian:

added the following to the ./sites-available/wp_container.conf virtual hosts file. Note that AllowOverride must be placed inside <Directory ...>

...
Include conf-available/rewrite.conf
<Directory /var/www/html/wp_container/>
  AllowOverride All
</Directory>
...