Will this feature be backported to 1.4?

No, setting boot=local will run a completely different set of ("vanilla") boot-scripts, which (i guess) will not set up the special mounts that VyOS requires, and you will end up in initramfs with an error.

Nope, scrap the above. (Even though it would not surprise me if systemd would be able to perform such tasks in initramfs or else where.)

My guess is that a whole bunch of systemd-things are missing inside initramfs.
For example systemd-fsck-root.service has Before=local-fs.target shutdown.target & ConditionPathIsReadWrite=!/ which (to me) suggests it should be ran from inside initramfs, before your root partition is mounted.

I ran what you suggested, but it still shows wrong block/inode count right after boot.

I managed to enter initramfs on the machine running in a VM by appending break to grub. From there I manually ran a fs check, which didn't show any issues.

Both attached files seem to be downloadable (but now viewable in browser) from the download-link in the upper right corner after clicking a file.

Another update. I noticed that all firewall configuration was gone (apart from the groups) after a reboot.

I have attached both files.

Yesterday I tested the latest 1.4-rolling-202308011218-image which includes CONFIG_VIRTIO_FS=m, and was successfully able to (manually) activate LXD Agent in my VM.
Thank you for the quick fix.

I'm using the *-parameters in isc-dhcp to manage ddns updates to an external nameserver. This way dns-entries supplied by dhcp-server will be kept in sync, even when using dhcp-failover.
I would love to still be able to keep this functionality with Kea in some way. Either by providing corresponding custom-parameters, or adding native support for this scenario.