Comment 2 for bug 1818197

Having just been battling with this - config-set-passwords is run relatively late (config stage), which seems to mean the network has to be up properly before it is executed..
if you get dropped into maintenance mode, or manually edit the image to provide a log in, "cloud-init status" and "cloud-init analyze show" will tell you what is going on.

TL;DR : relying on "password:" to create a user account you can log in with to diagnose network problems, isn't going to work :/