Comment 6 for bug 1608953

https://github.com/systemd/systemd/commit/6edefe0b06 is actually introducing a regression (disabling color mode for containers), and does not backport at all.

I think https://github.com/systemd/systemd/commit/3a18b6048950405 is much closer to what you actually need here: Calling make_null_stdio() for containers as well.

I backported that one change, verified that LXC and LXD still work fine, and put a test package into https://launchpad.net/~pitti/+archive/ubuntu/sru-test (systemd 229-4ubuntu7pitti1). I would appreciate if you could test this and confirm that it fixes the problem. There are no other packages in that PPA, so dist-upgrading to it is safe.

Thanks!