This bug was fixed in the package cloud-init -
0.7.7-22-g763f403-0ubuntu1

---------------
cloud-init (0.7.7-22-g763f403-0ubuntu1) yakkety; urgency=medium

  * New upstream snapshot.
    - apt-config: allow both old and new format to be present.
      [Christian Ehrhardt] (LP: #1616831)
    - python2.6: fix dict comprehension usage in _lsb_release. [Joshua Harlow]
    - Add a module that can configure spacewalk. [Joshua Harlow]
    - add install option for openrc [Matthew Thode]
    - Generate a dummy bond name for OpenStack (LP: #1605749)
  * debian/control, debian/README.source: update to reference git.
  * debian/new-upstream-snapshot: small fixes.

 -- Scott Moser <[email protected]>  Fri, 26 Aug 2016 15:22:13 -0400

** Changed in: cloud-init (Ubuntu)
       Status: In Progress => Fix Released

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https://bugs.launchpad.net/bugs/1616831

Title:
  cloud-init doesn't prefer new APT config format when old and new are
  provided

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