Came by to report this same issue. /usr/share/pam-config/mkhomedir is being ignored on Ubuntu 16.04 with this configuration:
Name: Create home directory during login Default: yes Priority: 900
Session-Type: Additional Session: required pam_mkhomedir.so umask=0077 skel=/etc/skel
It was working perfectly fine on Ubuntu 14.04.
Came by to report this same issue. /usr/share/ pam-config/ mkhomedir is being ignored on Ubuntu 16.04 with this configuration:
Name: Create home directory during login
Default: yes
Priority: 900
Session-Type: Additional
Session:
required pam_mkhomedir.so umask=0077 skel=/etc/skel
It was working perfectly fine on Ubuntu 14.04.