Comment 7 for bug 1599051

I filed https://bugs.launchpad.net/ubuntu/+source/aptdaemon/+bug/1599981 to track the issues we've found in aptdaemon which appear to be causing this.

We'll workaround this issue by prompting for the password in clear text. I'm finishing up testing this alternative now. It appears to be the least bad option given that update-manager and aptdaemon run without root privileges, which would be necessary for access to the debconf password database. This would also explain why you can't run into this particular issue if update-manager is run with sudo.