The cloud-init config that we have confirmed to work is formatted like this:
#cloud-config
datasource_list: [NoCloud]
users:
- name: ubuntu
sudo: "ALL=(ALL) NOPASSWD:ALL"
lock_passwd: false
ssh_authorized_keys:
- "ssh-rsa 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 ian.johnson@canonical.com"
Perhaps you need to include datasource_list: [NoCloud] in your config? I don’t know how cloud-init internally decides if it’s used or not, but all snapd does to decide if cloud-init should be disabled or not is by querying if there is a datasource being used or not.