Failed to load SELinux policy. System Freezing

Solution In Progress - Updated -

Issue

  • installed a new RHEL 7.1 Server and switched off SELinux (SELINUX=disabled in the file /etc/selinux/config). After reboot, the system freezes with the error
"Failed to load SELinux policy. Freezing"

Environment

  • Red Hat Enterprise Linux 7

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