Yes, a 
lock_passwd: false

is required to enable the password.

So
- remove the identity section complety
- change password: key to passwd: 
- add lock_passwd: false
- wait for some time after first login prompt

is what is needed to get the hadmut1 account and login with password
'ubuntu'. hadmut2 is never created and hadmut3 is temporarily created on
the temporary machine performing the installation procedure.

So it's rather a problem of insufficient documentation than of cloud-
init itself.

However, cloud-init had formerly already caused me plenty of headache
and debugging work since it is not obvious that cloud-init remains
active and changing the machine after first boot. Problems I had was
that cloud-init resets a change hostname to what it has stored somewhere
in a file, thus making it impossible to change the host name
permanently, or recreating the ssh host keys because of timing problems
when renaming the ethernet device twice, having problems to identify and
believing to be on a new machine. All of these effects seem to not have
been documented.

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https://bugs.launchpad.net/bugs/1923045

Title:
  cloud-init  + installer not creating user accounts

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