I cannot confirm this, at least for the following conditions:

Host: Lubuntu 16.04.1, 4.4.0-53-generic kernel
Hypervisor: VirtualBox 5.1.14-112924~Ubuntu~xenial
VM: 32-bit, 20GB disk (fixed or dynamic), 2GB RAM
Installation media: Kubuntu 16.04.2 i386
Initial install: standard entire disk

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https://bugs.launchpad.net/bugs/1663298

Title:
  Xubuntu 16.04.2 has no auto-resize installation option

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