Public bug reported:

/usr/share/doc/installation-guide-i386/example-preseed.txt.gz
says:

# Set to true if you want an encrypted private directory for the first user.
d-i user-setup/encrypted-private boolean false

but that still asked... looking at logs I came up with:
d-i user-setup/encrypt-home boolean false

** Affects: ubuntu
     Importance: Undecided
         Status: New

-- 
encrypted-private should be encrypt-home
https://bugs.launchpad.net/bugs/323174
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