Out of curiosity, what is the contents of your /etc/dnsmasq.d directory?
Is there a symlink in there to /etc/dnsmasq.d-available/libvirt-daemon?
What is the contents of that file?

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https://bugs.launchpad.net/bugs/2055776

Title:
  After updating ubuntu, the network to which the subnet address is
  assigned does not become active in KVM.

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