I tried to reproduce this in an up-to-date bionic VM as follows:

# inside the bionic VM
sudo snap install lxd
sudo lxd init # accept defauls
sudo lxc launch ubuntu-daily:hirsute hirsute
sudo lxc exec hirsute /bin/bash


# then inside the hirsute container install livecd-rootfs
apt update
apt install livecd-rootfs

# http works as expected with no changes
wget -q www.google.com -O/dev/null && echo Working || echo Failed
Working # works as expected with no iptables rule

# add iptables rule manually
iptables -t nat -A OUTPUT -p tcp --dport 80 -m owner ! --uid-owner daemon \
           -j REDIRECT --to 8080

# now we expect it to fail as there is no magic-proxy running yet
wget -q www.google.com -O/dev/null && echo Working || echo Failed
Failed

# start the magic-proxy manually
/usr/share/livecd-rootfs/magic-proxy  \
       --address="127.0.0.1"          \
       --port=8080                    \
       --run-as=daemon                \
       --cutoff-time=0                \
       --log-file=livecd.magic-proxy.log  \
       --pid-file=magic-proxy.pid     \
       --background                   \
       --setsid

# wget works as expected via the proxy
wget -q www.google.com -O/dev/null && echo Working || echo Failed
Working

# kill the proxy
killall magic-proxy

# fails again
wget -q www.google.com -O/dev/null && echo Working || echo Failed
Failed

# remove iptables rule
iptables -t nat -D OUTPUT -p tcp --dport 80 -m owner ! --uid-owner daemon \
           -j REDIRECT --to 8080

# works as normal
wget -q www.google.com -O/dev/null && echo Working || echo Failed
Working

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https://bugs.launchpad.net/bugs/1917920

Title:
  magic-proxy broke with iptables 1.8.7-1ubuntu2

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