Confirming.
line 4 of /etc/X11/Xsession.d/60x11-localhost reads:
xhost +si:localuser:`id -un` >& /dev/null
Getting rid of the ampersand (&) makes it work:
xhost +si:localuser:`id -un` > /dev/null
** Changed in: xorg-server (Ubuntu)
Status: New => Confirmed
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Xsession error after upgrade xhost problem
https://bugs.launchpad.net/bugs/340730
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