Steps to reproduce:

1. create new freestyle job
2. enable Build inside a Docker container
3. select Pull docker image from repository
4. fill in Image id/tag (any image, e.g. ubuntu)
5. click Advanced
6. set Docker server URI to a remote docker server, e.g. tcp://192.168.2.14:2375
7. add a Execute shell build step
8. use anything as Command (e.g. env)
9. save and run the job

Expected outcome:
Job succeeds, the command is run inside a remote container.

Actual outcome:
Job fails, console output contains:

Started by user anonymous
Building on master in workspace /var/jenkins_home/jobs/test-dock-env/workspace
...
$ docker run --tty --detach --user 1000:1000 --workdir /var/jenkins_home/jobs/test-dock-env/workspace --volume /var/jenkins_home/jobs/test-dock-env/workspace:/var/jenkins_home/jobs/test-dock-env/workspace:rw --volume /tmp:/tmp:rw --env ******** ... ubuntu cat
Docker container e93275a1a8256acd427bc21e1b9ab9850695198d231dad4792326e33b5d6d362 started to host the build
[workspace] $ docker exec --tty e93275a1a8256acd427bc21e1b9ab9850695198d231dad4792326e33b5d6d362 /bin/sh -xe /tmp/hudson8942168893563194578.sh
/bin/sh: 0: Can't open /tmp/hudson8942168893563194578.sh
Build step 'Execute shell' marked build as failure

Notes:
Basically this can't work as the plugin assumes it can share source/scripts with the container using host bind mounts, which is not the case when using a remote docker server. Same situation arises when Jenkins itself is run in a container.

I don't currently have a great idea on how to solve this.

AFAICT the only concept that would work with remote dockers would be to stream the source/scripts to the container in a similar way as docker client streams context to the daemon during a build.