Repeated container builds fail to find snapcraft.yaml

When I try to use snapcraft’s container builds, the first time goes fine:

Creating snapcraft-project
Mounting /home/user/project into container
Device /root/build_project added to snapcraft-project
 # built fine

But a subsequent one fails to find snap/snapcraft.yaml:

Mounting /home/user/project into container
Waiting for a network connection...
Network connection established
Hit:1 xenial InRelease
Hit:2 xenial-updates InRelease                                      
Hit:3 xenial-backports InRelease                                    
Hit:4 xenial-security InRelease       
Get:5 xenial/main Sources [868 kB]
Get:6 xenial-security/main Sources [86.4 kB]
Get:7 xenial/restricted Sources [4808 B]      
Get:8 xenial/universe Sources [7728 kB]                
Get:9 xenial-security/restricted Sources [2604 B]     
Get:10 xenial-security/universe Sources [37.8 kB]
Get:11 xenial-security/multiverse Sources [1144 B]
Get:12 xenial/multiverse Sources [179 kB]
Get:13 xenial-updates/main Sources [269 kB]
Get:14 xenial-updates/restricted Sources [3012 B]
Get:15 xenial-updates/universe Sources [167 kB]
Get:16 xenial-updates/multiverse Sources [7232 B]
Get:17 xenial-backports/main Sources [3312 B]
Get:18 xenial-backports/universe Sources [4404 B]
Fetched 9361 kB in 2s (3463 kB/s)                        
Reading package lists... Done
Reading package lists... Done
Building dependency tree       
Reading state information... Done
snapcraft is already the newest version (2.33).
The following packages were automatically installed and are no longer required:
  cmake cmake-data cmake-extras git golang golang-1.6 golang-1.6-doc golang-1.6-go golang-1.6-race-detector-runtime golang-1.6-src golang-doc golang-go golang-race-detector-runtime golang-src libcurl3 libjsoncpp1 pkg-config
Use 'apt autoremove' to remove them.
0 upgraded, 0 newly installed, 0 to remove and 3 not upgraded.
Could not find snap/snapcraft.yaml. Are you sure you are in the right directory?
To start a new project, use `snapcraft init`
Stopping local:snapcraft-project
Traceback (most recent call last):
  File "/snap/snapcraft/349/bin/snapcraft", line 11, in <module>
    load_entry_point('snapcraft==2.33', 'console_scripts', 'snapcraft')()
  File "/snap/snapcraft/349/usr/lib/python3.6/site-packages/pkg_resources/", line 565, in load_entry_point
    return get_distribution(dist).load_entry_point(group, name)
  File "/snap/snapcraft/349/usr/lib/python3.6/site-packages/pkg_resources/", line 2631, in load_entry_point
    return ep.load()
  File "/snap/snapcraft/349/usr/lib/python3.6/site-packages/pkg_resources/", line 2291, in load
    return self.resolve()
  File "/snap/snapcraft/349/usr/lib/python3.6/site-packages/pkg_resources/", line 2297, in resolve
    module = __import__(self.module_name, fromlist=['__name__'], level=0)
  File "/snap/snapcraft/349/lib/python3.6/site-packages/snapcraft/cli/", line 19, in <module>
  File "/snap/snapcraft/349/lib/python3.6/site-packages/click/", line 722, in __call__
    return self.main(*args, **kwargs)
  File "/snap/snapcraft/349/lib/python3.6/site-packages/click/", line 697, in main
    rv = self.invoke(ctx)
  File "/snap/snapcraft/349/lib/python3.6/site-packages/click/", line 1043, in invoke
    return Command.invoke(self, ctx)
  File "/snap/snapcraft/349/lib/python3.6/site-packages/click/", line 895, in invoke
    return ctx.invoke(self.callback, **ctx.params)
  File "/snap/snapcraft/349/lib/python3.6/site-packages/click/", line 535, in invoke
    return callback(*args, **kwargs)
  File "/snap/snapcraft/349/lib/python3.6/site-packages/click/", line 17, in new_func
    return f(get_current_context(), *args, **kwargs)
  File "/snap/snapcraft/349/lib/python3.6/site-packages/snapcraft/cli/", line 102, in run
  File "/snap/snapcraft/349/lib/python3.6/site-packages/click/", line 553, in forward
    return self.invoke(cmd, **kwargs)
  File "/snap/snapcraft/349/lib/python3.6/site-packages/click/", line 535, in invoke
    return callback(*args, **kwargs)
  File "/snap/snapcraft/349/lib/python3.6/site-packages/snapcraft/cli/", line 138, in snap
    lifecycle.containerbuild('snap', project_options, output, directory)
  File "/snap/snapcraft/349/lib/python3.6/site-packages/snapcraft/internal/", line 343, in containerbuild
    metadata=config.get_metadata()).execute(step, args)
  File "/snap/snapcraft/349/lib/python3.6/site-packages/snapcraft/internal/", line 228, in execute
    super().execute(step, args)
  File "/snap/snapcraft/349/lib/python3.6/site-packages/snapcraft/internal/", line 140, in execute
    raise e
  File "/snap/snapcraft/349/lib/python3.6/site-packages/snapcraft/internal/", line 134, in execute
    self._container_run(command, cwd=self._project_folder)
  File "/snap/snapcraft/349/lib/python3.6/site-packages/snapcraft/internal/", line 89, in _container_run
    check_call(['lxc', 'exec', self._container_name, '--'] + cmd)
  File "/snap/snapcraft/349/usr/lib/python3.6/", line 291, in check_call
    raise CalledProcessError(retcode, cmd)
subprocess.CalledProcessError: Command '['lxc', 'exec', 'local:snapcraft-project', '--', 'bash', '-c', 'cd /root/build_project; snapcraft snap --output project_2017.0.0_amd64.snap']' returned non-zero exit status 1.

Is this a released snapcraft or master?

I can reproduce on master. Will get back to you after investigating this more.