I've done something similar.
I have an OpenWRT router installed on a VM. I then have another VM on the same server running Ubuntu 20.04.
With Proxmox I can add a new VLAN interface to each VM (basically I have a single ETH port which runs my LAN on VLAN 0, the default VLAN, and on VLAN 100 I have this bridge between OpenWRT and the VM).
Because the VM is running Ubuntu, I have all correct drivers to handle tethering and if I bridge the tethering interface and the VLAN 100 I can add a new interface to OpenWRT (eg. ETH0.100) and get tethering to this virtual ethernet.
The coolest thing about this architecture is that I can even load balance the ethernet network provided by my ISP and tethering devices (luckily mwan3 package works like a charm).
Yes, I know this OpenWRT guide, but unfortunately, USB passthrough to OpenWRT has some issues.
Using OpenWRT on a VM is much more flexible than having it on a router. If you don't have any compatible router (or like me you brick the only one compatible), you should give VM a try.
One possible issue you could have due to VLANs is that you are using a very low-end unmanaged switch which does weird things with VLANs. In this case, you have to buy a managed switch and block all VLANs which aren't useful for your network.
One last thing, if you don't want to use Proxmox (I highly discourage this), I know it is possible to install OpenWRT on Docker, but as far as I know, you will likely to encounter lots of issues.