Comment 1 for bug 903993

This makes sense to me. Its simpler even than you suggest. I see no good reason that cloud-init ever should read from stdin, so it should probably just re-open stdin as /dev/null. Any program that hangs waiting for input from a non tty like /dev/null is doing things wrong, or is being invoked incorrectly.

I don't see this as High though, as it can be worked around by not running programs that wait for input from stdin. Dropping to Medium, and forwarding to cloud-init upstream project.