First off, I tried this simplified in the Browser https://codesandbox.io/s/competent-bassi-yjtoj and it works as expected.
In my project I'm using Electron, React and MUI and plain CSS. I do not know which of these is causing the issue. It might be simply that the CSS / Flexbox code is not correct?
Video demonstrating the issue: https://youtu.be/ym9Bhgexycs
Notice that once you try to scroll to the "bottom" in the inner container, you need to continue to scroll which is taken over by the main container; which then scrolls to the bottom of the outer container, to see the bottom of the inner container.
I tried several combinations. Disabled the outer containers overflow and set it to hidden and used auto for the inner container. Which I believe  is normally correct because that's the behavior I want, to have the inner container scrollable only. In that case the inner container gets cut off and I can not scroll inside the inner container to the bottom. The scroll bar simply disappears because I am scrolling in a non see-able area.
The outer container has correct height and is not overflowing the status bar / footer.
The inner container clearly overflow the statusbar.
I also disabled all window related options in Electron in other tries but the issue persists.
It's a bit hard to provide a code demo illustrating the issue but here are the "main" parts which the video shows.
Globals
const styles = () => ({
  '@global': {
    'html,body': {
      height: '100%',
      margin: 0
    },
    '*': { minHeight: 0 }, // Seems to have no effect.
    '#parcel-root': { // Probably not needed.
      height: '100%',
      margin: 0
    }
  }
})
Component
  container: {
    height: '100%',
    width: '100% !important',
    display: 'flex',
    flexDirection: 'column',
    minHeight: 0,  // Suggested by Felix here but had no effect.
  },
  content: {
    flex: 1,
    overflow: 'auto',
  },
  subContainer: {
    height: '100%',
    width: '50%',
    display: 'flex',
    flexDirection: 'column',
    backgroundColor: 'blue'
  },
  subContent: {
    flex: 1,
    overflow: 'auto',
    backgroundColor: 'grey'
  },
<div className={classes.container}>
    <div name="TITLE">TITLE</div>
    <div name="CONTENT" className={classes.content}>
        SUB TITLE
        <div className={classes.subContainer}>
            <div className={classes.subContent}>
                -----   MY SCROLLABLE SUB COMPONENT DATA  ----
            </div>
        </div>
    </div>
    <div name="FOOTER">FOOTER</div>
</div>
All dependencies used are the newest releases.
Thanks in advance for your time.
EDIT
The only work-around I have found is using:
height: calc(100vh - 35px)
applied to subContainer but I have no idea where those 35px are coming from. I removed padding of all elements. I would like to find a real solution which is not based on a fixed pixel size .. or at least understand what is actually causing this issue.