nota bene: this is could be completely unrelated
The following is only relevant if snap info shows snapd 2.60.2 and snap debug sandbox-features includes parser:snapd-internal.
If your lxd is following latest/stable and it happened not before last week it might be due to a bug in snapd 2.60.2 . In that case, reverting the lxd snap to 2.60.1 or refresh to latest/candidate channel to get 2.60.3 might help
New bugfix release 2.60.3 includes the relevant fix: ‘Fix missing integration of the /etc/apparmor.d/tunables/home.d/ apparmor to support non-standard home directories’
from snap info lxd:
latest/stable: 2.60.2 2023-08-22 (19993) 42MB -
latest/candidate: 2.60.3 2023-08-31 (20092) 42MB -
and the related forum topic in the snapd category is: