Comment 3 for bug 1951903

repro:
1. get a xenial system

2. install libvirt-bin
 $ apt install libvirt-bin
 $ id libvirt-dnsmasq
  uid=112(libvirt-dnsmasq) gid=116(libvirtd) groups=116(libvirtd)

3. upgrade to Bionic
 $ do-release-upgrade
 $ dpkg -l | grep libvirt
ii libvirt-bin 4.0.0-1ubuntu8.19 amd64 programs for the libvirt library
ii libvirt-clients 4.0.0-1ubuntu8.19 amd64 Programs for the libvirt library
ii libvirt-daemon 4.0.0-1ubuntu8.19 amd64 Virtualization daemon
ii libvirt-daemon-driver-storage-rbd 4.0.0-1ubuntu8.19 amd64 Virtualization daemon RBD storage driver
ii libvirt-daemon-system 4.0.0-1ubuntu8.19 amd64 Libvirt daemon configuration files
ii libvirt0:amd64 4.0.0-1ubuntu8.19 amd64 library for interfacing with different virtualization systems
 $ id libvirt-dnsmasq
uid=112(libvirt-dnsmasq) gid=116(libvirtd) groups=116(libvirtd)

4. since the upgrade usually isn't purging, call purge manually
 $ apt remove --purge libvirt-daemon-system
...
Removing libvirt-daemon dnsmasq configuration
(Reading database ... 31960 files and directories currently installed.)
Purging configuration files for libvirt-daemon-system (4.0.0-1ubuntu8.19) ...
/usr/sbin/delgroup: `libvirt-dnsmasq' still has `libvirtd' as their primary group!
/usr/sbin/delgroup: `libvirt-dnsmasq' still has `libvirt' as their primary group!
userdel: group libvirt-dnsmasq not removed because it is not the primary group of user libvirt-dnsmasq.
dpkg: error processing package libvirt-daemon-system (--purge):
 installed libvirt-daemon-system package post-removal script subprocess returned error exit status 128

So this is reproducible, odd to come up so late - seems no one ever wanted to purge a pre 18.04 installed libvirt since 2016 :-)

Still the user handling might be a red-herring and the issue a different one.

To retrigger it from here (a bit faster than the upgrade)
$ apt install libvirt-daemon-system
$ killall dnsmasq
$ userdel libvirt-dnsmasq
$ addgroup --system libvirtd
$ adduser --quiet --system --ingroup libvirtd --disabled-login --disabled-password --home /var/lib/libvirt/dnsmasq --no-create-home libvirt-dnsmasq
$ apt remove --purge libvirt-daemon-system