I can confirm this bug is still present while installing Ubuntu 16.04.2
amd64 (using mini.iso under qemy-system-x86_64). I selected expert
command-line install, made all the steps manually, selected a "normal
installation" but the installer fails on "Install the system" step.
Looking into syslog, for each attempt, I can see:

base-installer: error: Could not find any live images
...
...
...
main-menu[248]: WARNING **: Configuring 'live-installer' failed with error code 
1
main-menu[248]: WARNING **: Menu item 'live-installer' failed.

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https://bugs.launchpad.net/bugs/1185844

Title:
  DI fails at "Install the system"

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