That's indeed what seems to be the case, and this has already been
debugged. The issue is that the code that does the override on upgrade
looks for the wrong version of NetworkManager, since it has been updated
in Xenial.

This change has been in the process of being tested; I'll upload to the
release proper as soon as I know that it really does work.

The netplan code itself should be created only on new installs; for an
upgrade, it's not there, and thus we need to explicitly write an
override for NM via NM postinst.

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https://bugs.launchpad.net/bugs/1676547

Title:
  No network connectivity after upgrade from 16.04 to 16.10

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