This also affects Ubuntu Xenial on DigitalOcean and AWS EC2, where the
defaults are overridden by /etc/default/grub.d/50-cloudimg-settings.cfg.

I think it would help, if the additional location was mentioned in
grub.cfg, which currently states:

# It is automatically generated by grub-mkconfig using templates
# from /etc/grub.d and settings from /etc/default/grub

In addition the /etc/default/grub.d location should be mentioned inside
/etc/default/grub.

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https://bugs.launchpad.net/bugs/1569567

Title:
  Running update-grub does not update /boot/grub/grub.cfg with
  GRUB_CMDLINE_LINUX_DEFAULT from /etc/default/grub

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