Bug may be closed, issue is due our installation environment not Ubuntu.
Alessandro's comment helped track down the issue, so thank you and sorry for 
wasting your time.

Summary of issue on our end:

Following was found in our custom imaging process that creates this file
manually (for adding system-db:gdm), which broke logins due to the new
required missing file-db line:

Incorrect file contents (/etc/dconf/profile/gdm):
user-db:user
system-db:gdm

Corrected file contents (/etc/dconf/profile/gdm):
user-db:user
system-db:gdm
file-db:/var/lib/gdm3/greeter-dconf-defaults

Validated by:
apt-get download gdm3=50~beta-0ubuntu3
dpkg-deb -x gdm3_50~beta-0ubuntu3_amd64.deb /tmp/gdm3-50-validate
cat /tmp/gdm3-50-validate/usr/share/dconf/profile/gdm
user-db:user
file-db:/var/lib/gdm3/greeter-dconf-defaults

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https://bugs.launchpad.net/bugs/2143268

Title:
  gnome-shell launches in desktop mode instead of greeter mode

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