Ok, this is bug #826989, which is fixed in precise.
libpam-krb5 (4.4-3) unstable; urgency=low
* Change the pam-auth-update configuration to skip remaining password
stack by default modules if the Kerberos password change succeeds.
This is more useful behavior for the common case of Kerberos accounts
not having local passwords. See README.Debian.gz for information
about how to synchronize Kerberos and local passwords. (LP: #826989)
** Changed in: pam (Ubuntu)
Status: Incomplete => Fix Released
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https://bugs.launchpad.net/bugs/971253
Title:
only krb5 results in broken common-passwd
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