Comment 1 for bug 1702233

Why are you using xenial-proposed instead of xenial-updates?

-proposed installers are never ready for everyday consumption. And can only be successfully used by enabling proposed archive.

If you must use xenial-proposed for whatever reason, one must also use -proposed for the udebs and debs on the system. These are not enabled by default.

Specifically please pass "apt-setup/proposed=true" as the kernel cmdline argument and/or include equivalent in your preseed if used.