Comment 7 for bug 1389305

Ah, the ecryptfs $HOME might be the problem. I haven't tested that
and wouldn't be surprised if ecryptfs prevented the console from
looking ok. Could you try something like:

rm -rf $HOME/.config/lxc $HOME/.local/share/lxc
sudo mkdir /opt/lxc
sudo chown -R $USER /opt/lxc
mkdir /opt/lxc/config /opt/lxc/store
ln -s /opt/lxc/store $HOME/.local/share/lxc
ln -s /opt/lxc/config $HOME/.config/lxc

Then re-try the container create/setup. This will create the
container rootfs on a non-ecryptfs filesystem.