This bug was fixed in the systemd with 234-2ubuntu6 - Ignore failures to
set Nice priority on services in containers.

---
systemd (234-2ubuntu2) artful; urgency=medium

  * Ignore failures to set Nice priority on services in containers.
  * Disable execute test on armhf.
  * units: set ConditionVirtualization=!private-users on journald audit socket.
    It fails to start in unprivileged containers.
  * boot-smoke: refactor ADT test.
    Wait for system to settle down and get to either running or degraded state,
    then collect all metrics, and exit with an error if any of the tests failed.

 -- Dimitri John Ledkov <x...@ubuntu.com>  Wed, 02 Aug 2017 03:02:03
+0100

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https://bugs.launchpad.net/bugs/1576341

Title:
  systemd in degraded state on startup in LXD containers

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