This makes sense. I think we can minimally fix the messaging seen on the commandline when running `sudo cloud-init schema --system` to actually have it consume the rendered #cloud-config or #template: jinja user-data instead of the raw `#include ` as the potential source for invalid user-data. Minimally I think we need to fix https://github.com/canoncloud-config ical/cloud-init/blob/main/cloudinit/config/schema.py#L621-L623 to validated the processed/rendered userdata instead of "userdata_raw" so that `sudo cloud-init schema --system` provides a concise error about what the procesed invalid user-data is. I can validate that we get a less than desirable message from `sudo cloud-init schema --system` when we launch a container with a valid #include containing valid #cloud-config. reproducer: # terminal 1 on host system 192.168.1.8 $ mkdir -p instance-data $ cd instance-data $ cat > user-data < include.yaml <