I found the problem, the container needs to be privileged:

    spec:
      containers:
        - args:
            - -c
            - atlas deployments setup --type local --bindIpAll --username core --password core --force && tail -f /dev/null
          command:
            - /bin/sh
          image: mongodb/atlas
          name: mongo
          ports:
            - containerPort: 27017
          resources:
            requests:
              cpu: ".5"
              memory: 1Gi
          securityContext:
            privileged: true