I tested following

1. In a VM install Ubuntu 24.10 with LVM with encryption
2. Install dracut afterwards: sudo apt install dracut
3. Add rd.shell to the boot arguments
4. Reboot

It booted successfully. This was using dracut 102-3ubuntu2.

```
$ cat /etc/crypttab 
dm_crypt-0 UUID=b5422ba8-b534-41b0-8e91-ee502b5f0c4d none luks
$ cat /proc/cmdline 
BOOT_IMAGE=/vmlinuz-6.8.0-31-generic root=/dev/mapper/ubuntu--vg-ubuntu--lv ro 
quiet splash vt.handoff=7
$ systemd-analyze 
Startup finished in 732ms (kernel) + 15.905s (initrd) + 4min 32.746s 
(userspace) = 4min 49.385s 
graphical.target reached after 4min 32.709s in userspace.
```

I assume that this setup is equivalent to yours. So I am marking this
bug as fixed. Please reopen in case you still experience this bug.

** Changed in: dracut (Ubuntu)
       Status: New => Fix Released

** Changed in: dracut (Ubuntu)
   Importance: Undecided => Medium

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https://bugs.launchpad.net/bugs/2049221

Title:
  LUKS2 volumes are not unlocked without hostonly=yes

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