Comment 17 for bug 2004478

I have re-confirmed the fix using systemd 251.4-1ubuntu7.3 from kinetic-proposed:

root@kinetic:~# apt-cache policy systemd
systemd:
  Installed: 251.4-1ubuntu7.3
  Candidate: 251.4-1ubuntu7.3
  Version table:
 *** 251.4-1ubuntu7.3 500
        500 http://archive.ubuntu.com/ubuntu kinetic-proposed/main amd64 Packages
        100 /var/lib/dpkg/status
     251.4-1ubuntu7.1 500
        500 http://archive.ubuntu.com/ubuntu kinetic-updates/main amd64 Packages
        500 http://security.ubuntu.com/ubuntu kinetic-security/main amd64 Packages
     251.4-1ubuntu7 500
        500 http://archive.ubuntu.com/ubuntu kinetic/main amd64 Packages
root@kinetic:~# ip link add veth0 up type veth peer name veth1
root@kinetic:~# ip addr add 172.20.0.1/24 dev veth0
root@kinetic:~# cat > /etc/netplan/60-veth1.yaml <<EOF
network:
  version: 2
  ethernets:
    veth1:
      dhcp4: true
EOF
root@kinetic:~# dnsmasq -kq -C /dev/null -z -i veth0 -I lo -F 172.20.0.10,172.20.0.150 -O option:classless-static-route,169.254.0.0/24,0.0.0.0,169.254.1.0/24,172.20.0.2 &
[1] 1077
root@kinetic:~# netplan generate && netplan apply
root@kinetic:~# ip route
10.136.78.0/24 dev eth0 proto kernel scope link src 10.136.78.181 metric 100
169.254.0.0/24 dev veth1 proto dhcp scope link src 172.20.0.89 metric 100
169.254.1.0/24 via 172.20.0.2 dev veth1 proto dhcp src 172.20.0.89 metric 100
172.20.0.0/24 dev veth0 proto kernel scope link src 172.20.0.1
172.20.0.0/24 dev veth1 proto kernel scope link src 172.20.0.89 metric 100
172.20.0.1 dev veth1 proto dhcp scope link src 172.20.0.89 metric 100
172.20.0.2 dev veth1 proto dhcp scope link src 172.20.0.89 metric 100