I have the same problem.
For what I've seen the ServiceMonitor adds environment variables to the applicationhost.config. It seems like it doesn't update the dictionary correctly and that on a restart, when the keys are already added the first time, the exception is thrown.
For now I'm using the previous version of ServiceMonitor.exe which doesn't update environment variables. In my setup I don't need them to be there.
Too bad there is no source or documentation of the ServiceMonitor yet.

Acknowledging this is a regression on our part. We're working to fix this.

@jwgoedheer is there a url you can share to that old ServiceMonitor?

Old (before June 2017) service monitor- https://github.com/Microsoft/iis-docker/raw/8ffb45926630255cff635b6c693e0efd43a96aa7/windowsservercore/ServiceMonitor.exe

Any hint on how I can replace the existing file in my container? I mapped my container to a host folder but once I access the folder I see no files.

Any hint on how I can replace the existing file in my container? I mapped my container to a host folder but once I access the folder I see no files.

@jorgecotillo I'm assuming you're trying to replace ServiceMonitor.exe? In my opinion, the simplest way to replace it is via an ADD directive in your Dockerfile.

@shirhatti gotcha, thanks!

We have a new ServiceMonitor that should address this issue. Please feel free to give it a spin #43 and give us your feedback.

Fixed in windowsservercore-10.0.14393.1480 (d6580f6)

Just wanted chime in and say that the 2.0.1.6 release still showed the behavior. I switched to the old release as per above and haven't seen the issue yet.

Can confirm issue persists with 2.0.1.6 (current) ServiceMonitor.exe against microsoft/aspnet:4.7.2-windowsservercore-ltsc2016 , The July-2017 1.1.0.1 version also caused the same symptom and I have had to roll back to 1.0.0.1 as suggested at the top of this thread.

Still no fun with microsoft/dotnet-framework:4.7.2-runtime-windowsservercore-ltsc2019 . bug exists

@shirhatti Even it did not work for the older ServiceMonitor . It stops the container

08/2020: Issue still exists.
I had convinced business for migration to Docker.
I was working on migrating monolithic application to Azure/Container but its too unstable and unreliable.
I see lot of blockers running containers in windows.
I am going to hold off until all these basic issues are resolved.

FWIW, run into the same error with dotnet/framework/aspnet:3.5 image when trying to restart IIS. As already said, the workaround was to downgrade to an old ServiceMonitor version found here.

You need to download the old version and include it in your container when building the image using something like
COPY ServiceMonitor.exe / on your Dockerfile.