Why does leapp preupgrade fail with error as "MountError: Mount operation with mode overlay from / to /var/lib/leapp/scratch/mounts/root/system_overlay failed: " ?

Issue

• The command leapp preupgrade fails with the following error:

  ==> Processing phase TargetTransactionFactsCollection
  ====> * target_userspace_creator
          Initializes a directory to be populated as a minimal environment to run binaries from the target system.
  Process Process-448:
  Traceback (most recent call last):
    File "/usr/lib64/python2.7/multiprocessing/process.py", line 258, in _bootstrap
      self.run()
    File "/usr/lib64/python2.7/multiprocessing/process.py", line 114, in run
      self._target(*self._args, **self.kwargs)
    File "/usr/lib/python2.7/site-packages/leapp/repository/actor_definition.py", line 72, in do_run
      actor_instance.run(*args, **kwargs)
    File "/usr/lib/python2.7/site-packages/leapp/actors/init.py", line 290, in run
      self.process(*args)
    File "/usr/share/leapp-repository/repositories/system_upgrade/common/actors/targetuserspacecreator/actor.py", line 52, in process
      userspacegen.perform()
    File "/usr/lib/python2.7/site-packages/leapp/utils/deprecation.py", line 42, in process_wrapper
      return target_item(*args, **kwargs)
    File "/usr/share/leapp-repository/repositories/system_upgrade/common/actors/targetuserspacecreator/libraries/userspacegen.py", line 671, in perform
      xfs_info=indata.xfs_info) as overlay:
    File "/usr/lib64/python2.7/contextlib.py", line 17, in enter
      return self.gen.next()
    File "/usr/share/leapp-repository/repositories/system_upgrade/common/libraries/overlaygen.py", line 220, in create_source_overlay
      with mounting.OverlayMount(name='system_overlay', source='/', workdir=root_mount.target) as root_overlay:
    File "/usr/share/leapp-repository/repositories/system_upgrade/common/libraries/mounting.py", line 363, in enter
      self.mount()
    File "/usr/share/leapp-repository/repositories/system_upgrade/common/libraries/mounting.py", line 338, in mount
      self.create()
    File "/usr/share/leapp-repository/repositories/system_upgrade/common/libraries/mounting.py", line 354, in create
      details=None)
  MountError: Mount operation with mode overlay from / to /var/lib/leapp/scratch/mounts/root/system_overlay failed: Command ['mount', '-t', 'overlay', 'overlay2', '-o', 'lowerdir=/,upperdir=/var/lib/leapp/scratch/mounts/root/upper,workdir=/var/lib/leapp/scratch/mounts/root/work', '/var/lib/leapp/scratch/mounts/root/system_overlay'] failed with exit code 32.