So, um, silly question but where are you actually applying this preseed
file?  I don't see anything relevant on the kernel command line; the
closest is ks=http://10.128.92.2/cblr/svc/op/ks/system/dx-autopilot-
intel, but since Kickstart is only supported by d-i-based images that
isn't going to work here.

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https://bugs.launchpad.net/bugs/1157065

Title:
  preseed install fails with "The username you entered (root) is
  reserved.."

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