Jamin, can you add the following to /etc/apparmor.d/usr.sbin.libvirtd:
capability fsetid,
Then do:
$ sudo apparmor_parser -r -W -T /etc/apparmor.d/usr.sbin.libvirtd
and report back if it resolves the issue for you.
** Changed in: libvirt (Ubuntu)
Status: Triaged => Incomplete
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does not support cloning vm storage on lvm backend
https://bugs.launchpad.net/bugs/613549
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