This seems to be an inotify issue - initctl isn't being notified of the
new configuration. If I run:

$ initctl reload-configuration

...then everything works as expected.

** Package changed: openssh (Ubuntu) => linux-meta (Ubuntu)

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https://bugs.launchpad.net/bugs/1015348

Title:
  openssh-server package does not start sshd on a live CD boot

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