Docker compose mounting folder to volume returns cannot remove '/(folder path)': Device or resource busy

I have the following docker compose configuration

myapp:
container_name: myapp_compose
volumes:
- config-folder:/home/myapp/.config:rw
....
volumes:
 config-folder:

Including the volume mount causes this error when starting the container

cannot remove '/home/myapp/.config': Device or resource busy

and the container never starts successfully. It does work if I remove the volume mount configuration.

I have tried docker-compose down and docker system prune which did not help. What can be the root cause and how could it be solved?