Can confirm I am also running into this. It's preventing vagrant
configurations that involve private networking from loading as this
error stops the provisioning process- basically making it impossible to
use these images for testing certain (fairly common) scenarios using
vagrant.

If there's a reason to keep the hostname out of /etc/hosts then
disabling DNS in sudo and ssh should resolve some of the issues.

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https://bugs.launchpad.net/bugs/1561250

Title:
  Xenial vagrant image is missing its hostname in /etc/hosts

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