Comment 4 for bug 1702233

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

However, this is the key missing bit. Yes, you need to pass this option when testing with d-i netboot images and then it will work.

There is no way to automate this because the installer image does not know at any given point in time that it is a -proposed vs. an -updates image. So there is no further change to be made here in Ubuntu.