ubuntu_kvm_smoke_test failed with ssh-keygen Permission denied failure on Oracle cloud with Impish kernel

Issue found on 5.13.0-22.22 Impish kernel with Oracle cloud.
Instances:
  * BM.Standard2.52
  * VM.DenseIO2.8
  * VM.Standard2.1

Test failed with:
 + ssh-keygen -f /home/ubuntu/.ssh/id_rsa -t rsa -N ''
 Saving key "/home/ubuntu/.ssh/id_rsa" failed: Permission denied

Test log:
Running 'sudo -u ubuntu /home/ubuntu/autotest/client/tests/ubuntu_kvm_smoke_test/the-test amd64'
 + SUT=bjf-test
 + SSH_KEY=/home/ubuntu/.ssh/id_rsa
 + SSH_OPTIONS='-o StrictHostKeyChecking=no -o UserKnownHostsFile=/dev/null -o LogLevel=quiet -i /home/ubuntu/.ssh/id_rsa'
 ++ lsb_release -c
 ++ awk '{print$2}'
 + DISTRO=impish
 + ARCHITECTURE=amd64
 + trap cleanup EXIT
 + '[' -z amd64 ']'
 + kvm-ok
 INFO: /dev/kvm exists
 KVM acceleration can be used
 + '[' 0 '!=' 0 ']'
 + set -e
 + '[' '!' -f /home/ubuntu/.ssh/id_rsa ']'
 + ssh-keygen -f /home/ubuntu/.ssh/id_rsa -t rsa -N ''
 Saving key "/home/ubuntu/.ssh/id_rsa" failed: Permission denied
 Generating public/private rsa key pair.
 + cleanup
 + uvt-kvm destroy bjf-test

This issue does not exist on other clouds / bare-metal instances. Also, this does not happen on Oracle cloud with Hirsute generic kernel as well.