I've verified 0.7.8-49 cloud-init from xenial-proposed archive in UC16
cloud-image, using core snap here:

https://launchpadlibrarian.net/294392203/core_16.04.1_amd64.manifest

Tested under local kvm as well OpenStack cloud and confirmed user
creation and snapuser creation work as expected.

** Tags removed: verification-needed
** Tags added: verification-done

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https://bugs.launchpad.net/bugs/1619393

Title:
  cloud-init useradd/groupadd fails on ubuntu-core-16 with readonly
  /etc/passwd

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