Turns out I had to create a folder :/ remove the loop script and bugfix

Procfile

@@ -1,3 +1,3 @@
-swarmmerge: /app/swarmloop.sh
+swarmmerge: while true; do ls -d /etc/nginx/node.conf.d/*.conf | entr -d python3 /app/mergeswarm.py; done
 dockergen: docker-gen -watch /app/nginx.tmpl /etc/nginx/node.conf.d/`hostname`.conf
 nginx: nginx

mergeswarm.py

@@ -1,5 +1,6 @@
 # -*- coding: utf-8 -*-
 
+import os
 import subprocess
 import sys
 from crossplane import parse, build
@@ -8,6 +9,10 @@ SWARM_CONFIG_FILE = '/etc/nginx/node.conf.d/swarm.conf'
 NGINX_OUTPUT = '/etc/nginx/conf.d/default.conf'
 NGINX_RELOAD = 'nginx -s reload'
 
+if not os.path.isfile(SWARM_CONFIG_FILE):
+    with open(SWARM_CONFIG_FILE, 'w') as f:
+        f.write("http { include ./*.conf; }")
+
 nginx_config = []
 swarm_config = parse(SWARM_CONFIG_FILE)['config']
 nodes = [f['parsed'] for f in swarm_config[1:-1]]

swarm.stack.yml

@@ -14,7 +14,7 @@ services:
             - "80:80"
         volumes:
             - /var/run/docker.sock:/tmp/docker.sock:ro
-            - /tmp/proxyconf:/var/nginx/node.conf.d/
+            - /tmp/proxyconf/:/etc/nginx/node.conf.d/
 
     whoami1:
         deploy:

swarmloop.sh

@@ -1,4 +0,0 @@
-while true;
-do
-    ls -d /etc/nginx/node.conf.d/*.conf | entr -d python3 /app/mergeswarm.py;
-done