while-read not working int alpine docker image?

I'm trying to read a file content into variables inside an alpine image. But even reading plane lines and printing them does not work:

  echo:
    image: alpine:latest
    command: |
      sh -c '
        echo "info\n" | while read -r line; do
          printf "text around $line"
        done
      '

docker compose up echo always results in empty console, nothing is printed. Why?

The $line is being interpreted by docker compose and not the shell inside the container. To escape that from compose, use a second $, e.g.:

services:
  echo:
    image: alpine:latest
    command: |
      sh -c '
        echo "info\n" | while read -r line; do
          printf "text around $$line"
        done
      '

$ docker compose up
[+] Running 1/1
 ✔ Container test-echo-1  Recreated                                                                 0.1s
Attaching to echo-1
echo-1  | text around info
echo-1 exited with code 0

For more details on how compose expands variables, see https://docs.docker.com/reference/compose-file/interpolation/