I can't reproduce this - please give a few more details:

1. Are you running virt-manager on a remote node?  What exact, full
connection url is it using?

2. How far into the creation of the VM did it get?

3. What exact options did you use for creating the VM?

If you 'sudo stop libvirt-bin;  sudo start libvirt-bin'  does VM
creation succeed after that?

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https://bugs.launchpad.net/bugs/1057024

Title:
  internal error Process exited while reading console log output: char
  device redirected to /dev/pts/1 error when creating a vm

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