Extended the SRU verification test case to validate that expected changes are present in mount-image-callback which loop over "fstype in overlay overlayfs". I can confirm both that proper bits are uploaded in any overlay fs is functional using cloud-utils (0.27-0ubuntu25.2). #### Updated test script #!/bin/bash set -x cat > install_hwe_kernel_and_overlay_root.sh < /dev/null echo --- No overlayfs mounts on initial boot expect_overlayfs_mounts 0 multipass transfer install_hwe_kernel_and_overlay_root.sh $VM:. multipass exec $VM -- sudo bash ./install_hwe_kernel_and_overlay_root.sh echo "--- confirm overlay overlayfs patch present in mount-image-callback" fs_types=$(multipass exec $VM -- grep -c "for fstype in overlay overlayfs" /usr/bin/mount-image-callback) [[ "1" = "$fs_types" ]] || echo "FAILURE: didn't find 'for fstype in overlay overlayfs'" multipass exec $VM -- sudo sh -c "echo overlayroot=tmpfs:recurse=0 | sudo tee -a /etc/overlayroot.local.conf" multipass restart $VM echo "--- expect 1 overlayfs mounts because using HWE kernel" multipass exec $VM -- cloud-init status --wait --long expect_overlayfs_mounts 1 multipass exec $VM -- sudo sh -c "echo overlayroot=tmpfs:recurse=1 | sudo overlayroot-chroot tee /etc/overlayroot.local.conf" multipass restart $VM expect_overlayfs_mounts 1 multipass exec $VM -- grep overlay /etc/fstab || echo "FAIL: didn't find overlayroot" multipass exec $VM -- grep success /run/initramfs/overlayroot.log || echo "FAIL: didn't find overlayroot" ### Xenial verification results + cat + VM=sru-1493188 + RELEASE=xenial + multipass launch daily:xenial -n sru-1493188 Launched: sru-1493188 + multipass exec sru-1493188 -- cloud-init status --wait --long + echo --- No overlayfs mounts on initial boot --- No overlayfs mounts on initial boot + expect_overlayfs_mounts 0 + expected_mounts=0 ++ multipass exec sru-1493188 mount ++ grep overlay -c + overlay_mounts=0 + [[ 0 = \0 ]] + echo 'SUCCESS: found 0 overlay mounts' SUCCESS: found 0 overlay mounts + multipass transfer install_hwe_kernel_and_overlay_root.sh sru-1493188:. + multipass exec sru-1493188 -- sudo bash ./install_hwe_kernel_and_overlay_root.sh 3.) Enable proposed, install HWE kernel and install overlayroot to show fix. deb http://archive.ubuntu.com/ubuntu xenial-proposed main Get:1 http://security.ubuntu.com/ubuntu xenial-security InRelease [109 kB] Hit:2 http://archive.ubuntu.com/ubuntu xenial InRelease Get:3 http://archive.ubuntu.com/ubuntu xenial-updates InRelease [109 kB] Get:4 http://security.ubuntu.com/ubuntu xenial-security/universe amd64 Packages [774 kB] Get:5 http://security.ubuntu.com/ubuntu xenial-security/universe Translation-en [219 kB] Get:6 http://security.ubuntu.com/ubuntu xenial-security/multiverse amd64 Packages [8,236 B] Get:7 http://security.ubuntu.com/ubuntu xenial-security/multiverse Translation-en [2,888 B] Get:8 http://archive.ubuntu.com/ubuntu xenial-backports InRelease [107 kB] Get:9 http://archive.ubuntu.com/ubuntu xenial-proposed InRelease [260 kB] Get:10 http://archive.ubuntu.com/ubuntu xenial/universe amd64 Packages [7,532 kB] Get:11 http://archive.ubuntu.com/ubuntu xenial/universe Translation-en [4,354 kB] Get:12 http://archive.ubuntu.com/ubuntu xenial/multiverse amd64 Packages [144 kB] Get:13 http://archive.ubuntu.com/ubuntu xenial/multiverse Translation-en [106 kB] Get:14 http://archive.ubuntu.com/ubuntu xenial-updates/main amd64 Packages [1,880 kB] Get:15 http://archive.ubuntu.com/ubuntu xenial-updates/universe amd64 Packages [1,195 kB] Get:16 http://archive.ubuntu.com/ubuntu xenial-updates/universe Translation-en [349 kB] Get:17 http://archive.ubuntu.com/ubuntu xenial-updates/multiverse amd64 Packages [23.0 kB] Get:18 http://archive.ubuntu.com/ubuntu xenial-updates/multiverse Translation-en [8,632 B] Get:19 http://archive.ubuntu.com/ubuntu xenial-backports/main amd64 Packages [9,812 B] Get:20 http://archive.ubuntu.com/ubuntu xenial-backports/main Translation-en [4,456 B] Get:21 http://archive.ubuntu.com/ubuntu xenial-backports/universe amd64 Packages [11.3 kB] Get:22 http://archive.ubuntu.com/ubuntu xenial-backports/universe Translation-en [4,476 B] Get:23 http://archive.ubuntu.com/ubuntu xenial-proposed/main amd64 Packages [80.1 kB] Get:24 http://archive.ubuntu.com/ubuntu xenial-proposed/main Translation-en [21.9 kB] Fetched 17.3 MB in 4s (3,585 kB/s) Reading package lists... Done linux-image-4.15.0-122-generic linux-image-generic-hwe-16.04 cloud-utils-euca shunit2 wodim cdrkit-doc fdutils linux-hwe-tools amd64-microcode cloud-image-utils cloud-utils crda distro-info genisoimage linux-image-4.15.0-122-generic linux-image-generic-hwe-16.04 Get:22 http://archive.ubuntu.com/ubuntu xenial-updates/main amd64 linux-image-4.15.0-122-generic amd64 4.15.0-122.124~16.04.1 [7,996 kB] Get:26 http://archive.ubuntu.com/ubuntu xenial-updates/main amd64 linux-image-generic-hwe-16.04 amd64 4.15.0.122.122 [2,386 B] Get:36 http://archive.ubuntu.com/ubuntu xenial-proposed/main amd64 cloud-utils all 0.27-0ubuntu25.2 [1,514 B] Extracting templates from packages: 100% Selecting previously unselected package linux-image-4.15.0-122-generic. Preparing to unpack .../linux-image-4.15.0-122-generic_4.15.0-122.124~16.04.1_amd64.deb ... Unpacking linux-image-4.15.0-122-generic (4.15.0-122.124~16.04.1) ... Selecting previously unselected package linux-image-generic-hwe-16.04. Preparing to unpack .../linux-image-generic-hwe-16.04_4.15.0.122.122_amd64.deb ... Unpacking linux-image-generic-hwe-16.04 (4.15.0.122.122) ... Selecting previously unselected package cloud-utils. Preparing to unpack .../cloud-utils_0.27-0ubuntu25.2_all.deb ... Unpacking cloud-utils (0.27-0ubuntu25.2) ... Setting up linux-image-4.15.0-122-generic (4.15.0-122.124~16.04.1) ... Setting up linux-image-generic-hwe-16.04 (4.15.0.122.122) ... Setting up cloud-utils (0.27-0ubuntu25.2) ... Processing triggers for linux-image-4.15.0-122-generic (4.15.0-122.124~16.04.1) ... + echo '--- confirm overlay overlayfs patch present in mount-image-callback' --- confirm overlay overlayfs patch present in mount-image-callback ++ multipass exec sru-1493188 -- grep -c 'for fstype in overlay overlayfs' /usr/bin/mount-image-callback + fs_types=1 + [[ 1 = \1 ]] + multipass exec sru-1493188 -- sudo sh -c 'echo overlayroot=tmpfs:recurse=0 | sudo tee -a /etc/overlayroot.local.conf' overlayroot=tmpfs:recurse=0 + multipass restart sru-1493188 + echo '--- expect 1 overlayfs mounts because using HWE kernel' --- expect 1 overlayfs mounts because using HWE kernel + multipass exec sru-1493188 -- cloud-init status --wait --long .. status: done time: Mon, 09 Nov 2020 04:16:57 +0000 detail: DataSourceNoCloud [seed=/dev/sr0][dsmode=net] + expect_overlayfs_mounts 1 + expected_mounts=1 ++ multipass exec sru-1493188 mount ++ grep overlay -c + overlay_mounts=1 + [[ 1 = \1 ]] + echo 'SUCCESS: found 1 overlay mounts' SUCCESS: found 1 overlay mounts + multipass exec sru-1493188 -- sudo sh -c 'echo overlayroot=tmpfs:recurse=1 | sudo overlayroot-chroot tee /etc/overlayroot.local.conf' INFO: Chrooting into [/media/root-ro] overlayroot=tmpfs:recurse=1 + multipass restart sru-1493188 + expect_overlayfs_mounts 1 + expected_mounts=1 ++ multipass exec sru-1493188 mount ++ grep overlay -c + overlay_mounts=1 + [[ 1 = \1 ]] + echo 'SUCCESS: found 1 overlay mounts' SUCCESS: found 1 overlay mounts + multipass exec sru-1493188 -- grep overlay /etc/fstab # This fstab is in an overlay. The real one can be found at # sudo overlayroot-chroot /media/root-ro/ / overlay lowerdir=/media/root-ro/,upperdir=/media/root-rw/overlay/,workdir=/media/root-rw/overlay-workdir/_ 0 0 + multipass exec sru-1493188 -- grep success /run/initramfs/overlayroot.log [success]: configured root with 'tmpfs:recurse=1' using overlay per /dev/sda1/etc/overlayroot.local.conf