I've managed to reproduce the issue with LXD:
lxc delete testvm --force 2>/dev/null || true
lxc launch ubuntu:26.04 testvm
until lxc exec testvm -- sh -c 'ls -ld /home/ubuntu 2>/dev/null'; do sleep
1; done
lxc exec testvm -- rm -r /home/ubuntu
lxc exec testvm -- cloud-init clean --logs --reboot
until lxc exec testvm -- sh -c 'ls -ld /home/ubuntu 2>/dev/null'; do sleep
1; done
The first ls -ld prints
drwxr-x--- 2 ubuntu ubuntu 5 Jun 4 11:39 /home/ubuntu
The last ls -ld prints
drwxr-xr-x 3 root root 3 Jun 4 11:39 /home/ubuntu
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https://bugs.launchpad.net/bugs/2150646
Title:
Home directory has wrong ownership if the user exists but the home
directory itself is missing when cloud-init runs on first boot
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