I'm very familiar with an environment that has about 120 TByte of databases - Mongo and Postgres - 100% run in containers over about 75 namespaces in GKE. Handles being restarted without issue.

What benefits do they get from running databases in Kubernetes?

Once you containerize every part of your application stack, you can simplify support/deployment to a single model, and you get the advantages of everything that containerization has to offer - dynamic scaling, robust recovery, trivial application migration, etc... without having to build in special rules/processes for one-off elements. The database then become yet one more component in your environment that isn't treated any differently than any other component - with the possible exception of requesting that it be scheduled less ephemerally than other components.

I've seen it work in production for 3+ years - And I don't recall there ever being an issue with the databases being in a container - it's hard to imagine them being anywhere else.

After reading that I start thinking everything would be better containerized. So why not run kubernetes nodes in containers?

You can!

KinD[0] is a project to do just that, although production workloads are an explicit non-goal.

[0]: https://github.com/kubernetes-sigs/kind