** Attachment added: "debug.log"
   
https://bugs.launchpad.net/ubuntu/+source/systemd/+bug/1950787/+attachment/5540415/+files/debug.log

** Description changed:

  systemd-sysusers.service/systemd.exec fails to start in privileged 
containers, due to being unable to properly mount /dev for passing credentials, 
caused by the following config in the .service unit:
+ ```
  # Optionally, pick up a root password and shell for the root user from a
  # credential passed to the service manager. This is useful for importing this
  # data from nspawn's --set-credential= switch.
  LoadCredential=passwd.hashed-password.root
  LoadCredential=passwd.plaintext-password.root
  LoadCredential=passwd.shell.root
+ ```
  
  Reproducer:
  $ lxc profile set default security.privileged "true"
  $ lxc launch ubuntu-daily:jammy test
  $ lxc exec test bash
  # add-apt-repository ppa:ci-train-ppa-service/4704
  # apt install systemd # install systemd 249.5-2ubuntu1
  # systemctl restart systemd-sysusers
  # systemctl status systemd-sysusers
  # system --status=failed
  $ lxc profile set default security.privileged "false"
  
  A workaround is to disable it via:
  $ cat /etc/systemd/system/systemd-sysusers.service.d/override.conf:
  [Service]
  LoadCredential=
  
  Interesting logs:
  Nov 12 12:09:44 test systemd[1]: systemd-journald.service: Added fd 42 (n/a) 
to fd store.
  Nov 12 12:09:44 test systemd[431]: Mounting /dev (MS_REC|MS_SLAVE "")...
  Nov 12 12:09:44 test systemd[431]: Failed to mount n/a (type n/a) on /dev 
(MS_REC|MS_SLAVE ""): Permission denied
  Nov 12 12:09:44 test systemd[430]: (sd-mkdcreds) failed with exit status 1.
  Nov 12 12:09:44 test systemd[430]: systemd-sysusers.service: Failed to set up 
credentials: Protocol error
  Nov 12 12:09:44 test systemd[430]: systemd-sysusers.service: Failed at step 
CREDENTIALS spawning

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https://bugs.launchpad.net/bugs/1950787

Title:
  systemd-sysusers cannot mount /dev in privileged containers (to pass
  credentials)

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