I think I have figured it out...

My /etc/profile was sourcing /etc/bash.bashrc every time.

You must have made a change to /etc/X11/Xsession recently that means
when you source /etc/profile under sh you end up sourcing
/etc/bash.bashrc.

I assume I am in the wrong here so I have removed the line from
/etc/profile that sources /etc/bash_bashrc and things seem to work.

-- 
"shopt" xsession error upon login
https://launchpad.net/bugs/60079

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