In which environment does daemon reside in Docker Desktop for Mac?

Where does Docker Desktop daemon belong in a MacOS machine setup?

Is it safe to assume that it belongs within the virtual machine?

Referencing Docker official documentation:

Docker Desktop uses HyperKit instead of Virtual Box. Hyperkit is a lightweight macOS virtualization solution built on top of Hypervisor.framework in macOS 10.10 Yosemite and higher.

When you install Docker Desktop on Mac, machines created with Docker Machine are not affected.

Docker Desktop does not use docker-machine to provision its VM. The Docker Engine API is exposed on a socket available to the Mac host at /var/run/docker.sock. This is the default location Docker and Docker Compose clients use to connect to the Docker daemon, so you can use docker and docker-compose CLI commands on your Mac.