This bug was fixed in the package cloud-init - 0.7.8-49-g9e904bb-
0ubuntu1
---------------
cloud-init (0.7.8-49-g9e904bb-0ubuntu1) zesty; urgency=medium
* debian/cloud-init.postinst: update /etc/fstab on Azure to fix
future resize operations. (LP: #1611074)
* New upstream snapshot.
- Add activate_datasource, for datasource specific code paths.
Use that on Azure to handle re-formatting of ephemeral disk.
(LP: #1611074)
-- Scott Moser <smo...@ubuntu.com> Fri, 18 Nov 2016 16:37:34 -0500
** Changed in: cloud-init (Ubuntu)
Status: Confirmed => Fix Released
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https://bugs.launchpad.net/bugs/1611074
Title:
Reformatting of ephemeral drive fails on resize of Azure VM
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