I faced same problem with latest xenial build in lxd.
lxc init 7e745cf3a3a7 xenial lxc start xenial lxc exec xenial -- /bin/bash
root@xenial# echo 'Europe/Moscow' > /etc/timezone root@xenial# dpkg-reconfigure -f noninteractive tzdata root@xenial# cat /etc/timezone Etc/UTC
And nothing will be happened. Timezone is not changed.
I suppose that it is a tzdata package bug in 16.04.
I faced same problem with latest xenial build in lxd.
lxc init 7e745cf3a3a7 xenial
lxc start xenial
lxc exec xenial -- /bin/bash
root@xenial# echo 'Europe/Moscow' > /etc/timezone
root@xenial# dpkg-reconfigure -f noninteractive tzdata
root@xenial# cat /etc/timezone
Etc/UTC
And nothing will be happened. Timezone is not changed.
I suppose that it is a tzdata package bug in 16.04.