I am pretty sure this worked with an older version of the docker-entrypoint.sh, but I might be confusing it for a custom one I was using. :/

If you try to use the --auth-local=md5 argument to initdb, it fails because the password is not set.

Looking at entrypoint, the password handling comes after initdb, but it seems like it would make sense to add host all all all @authmethodhost@ to the pg_hba.conf.sample file and then let initdb do its thing instead of adding the line afterward.