Comment 9 for bug 2004478

I confirmed this fix using systemd 249.11-0ubuntu3.8 from jammy-proposed:

root@jammy:~# apt-cache policy systemd
systemd:
  Installed: 249.11-0ubuntu3.8
  Candidate: 249.11-0ubuntu3.8
  Version table:
 *** 249.11-0ubuntu3.8 500
        500 http://archive.ubuntu.com/ubuntu jammy-proposed/main amd64 Packages
        100 /var/lib/dpkg/status
     249.11-0ubuntu3.7 500
        500 http://archive.ubuntu.com/ubuntu jammy-updates/main amd64 Packages
        500 http://security.ubuntu.com/ubuntu jammy-security/main amd64 Packages
     249.11-0ubuntu3 500
        500 http://archive.ubuntu.com/ubuntu jammy/main amd64 Packages
root@jammy:~# ip link add veth0 up type veth peer name veth1
root@jammy:~# ip addr add 172.20.0.1/24 dev veth0
root@jammy:~# cat > /etc/netplan/60-veth1.yaml <<EOF
network:
  version: 2
  ethernets:
    veth1:
      dhcp4: true
EOF
root@jammy:~# dnsmasq -kq -C /dev/null -z -i veth0 -I lo -F 172.20.0.10,172.20.0.150 -O option:classless-static-route,169.254.0.0/24,0.0.0.0,169.254.1.0/24,172.20.0.2 &
[1] 1113
root@jammy:~# netplan generate && netplan apply
root@jammy:~# ip route
default via 10.136.78.1 dev eth0 proto dhcp src 10.136.78.229 metric 100
10.136.78.0/24 dev eth0 proto kernel scope link src 10.136.78.229 metric 100
10.136.78.1 dev eth0 proto dhcp scope link src 10.136.78.229 metric 100
169.254.0.0/24 dev veth1 proto dhcp scope link src 172.20.0.125 metric 100
169.254.1.0/24 via 172.20.0.2 dev veth1 proto dhcp src 172.20.0.125 metric 100
172.20.0.0/24 dev veth0 proto kernel scope link src 172.20.0.1
172.20.0.0/24 dev veth1 proto kernel scope link src 172.20.0.125 metric 100
172.20.0.1 dev veth1 proto dhcp scope link src 172.20.0.125 metric 100
172.20.0.2 dev veth1 proto dhcp scope link src 172.20.0.125 metric 100