Description

Attempting to re-use ignition v2 configs with Flatcar image 3227.2.0 leads to a non-provisioned VM, which just offers an emergency shell or auto reboot in 5 min.

Impact

Unable to provision new VMs in VMWare using ignition v2 configs.

Environment and steps to reproduce

1. Set-up:
   a. Download https://stable.release.flatcar-linux.net/amd64-usr/current/flatcar_production_vmware_ova.ova and deploy with ignition v2 configuration file.
2. Task:
   a. Flatcar attempts to boot, runs ignition stage, doesn't print anything that'd point to any errors in the ignition config, thinks a bit and offers an emergency shell. Pressing Enter to enter it doesn't work, it just tries to re-run its boot sequence.
3. Action(s):
   a. Deploy OVA file downloaded from the official website.
   b. Put ignition config and its encoding into the guestinfo fields.
   c. Power on the VM.
4. Error:
   a. Watch Flatcar not booting up.

Expected behavior

VM provisioned, flatcar linux booted up to login prompt.

Additional information

Taking image 3139.2.2 and re-doing same steps works perfectly fine. Updating to 3227.2.0 or newer using update_engine_client after successful provisioning doesn't cause any issues either.

The ignition config is fairly large and we put it in gzip+b64 format in guestinfo. Doing the same with image 3139.2.2 works just fine, we can see how ignition stage works, how it creates users and everything else (I can provide boot screenshots for 3139.2.2 too).

The following screenshots briefly show how ignition stage finished and what it ended up with.