I also ran into this issue... but with even more dire results.
I can login with domain accounts, but not local accounts. Even the
local admin account no longer works which means I can't even get
updates.
If I boot with
rw init=/bin/bash
and then try to reset the local admin users password I get
"Authentication token manipulation error".
--
likewise-open prevents local passwords from being changed
https://bugs.launchpad.net/bugs/302026
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