Actually, no, the current implementation is correct. See [1]. As such,
closing invalid (not-a-bug).

[1]https://blueprints.launchpad.net/ubuntu/+spec/umask-to-0002

** Changed in: coreutils (Ubuntu)
       Status: Incomplete => Invalid

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https://bugs.launchpad.net/bugs/1448438

Title:
  Home directories created with invalid mode

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