OK so this turned out to be a user error, so I'll have to reject this. I filed a bug against ubiquity to warn when /home isn't going to be formatted - see bug 56586 . Thanks for reporting this.
** Changed in: Ubuntu Status: Unconfirmed => Rejected -- Installed Ubuntu but cannot log in https://launchpad.net/bugs/56568 -- ubuntu-bugs mailing list ubuntu-bugs@lists.ubuntu.com https://lists.ubuntu.com/mailman/listinfo/ubuntu-bugs