Ok tried with new kernel but no change. I also figured out this is  nit related 
to the dock. Behaves the same when I connect the adapter directly to 
thunderbolt port on the laptop. Order matters here as well. First adapter, then 
cable :).
I will then create a bug for Intel graphics.

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https://bugs.launchpad.net/bugs/1817070

Title:
  Thunderbolt display not detected

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