This commit seems to be related:
https://github.com/lxc/distrobuilder/commit/33a4302ca5a62ed9eb9009dcc5059aecfb55ba41
But why does it not work in privileged containers?

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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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