- Switched `/etc/` from a custom overlayfs for A/B updates to using a systemd-confext extension providing the default contents by using systemd-confext in the mutable mode where `/etc/` gets used as upperdir [scripts#3555](https://github.com/flatcar/scripts/pull/3555)
- Moved systemd-sysext image mounting into the initrd, so that system extensions can better define the behavior of the final system at boot without workarounds to apply settings late at boot. This means `.wants` symlinks for systemd units work as expected now and, therefore, we dropped the `ensure-sysext.service` workaround. We still recommend extensions to keep their workarounds, e.g., using `.upholds` instead of `.wants`, to better support live reloading. A skipping logic prevents an extension refresh late at boot but only if no changes were found. For extensions that are not stored on a custom filesystem, such as a separate `/var` partition, the new extension mounting from the initrd won't be able to load them early but they will be picked up late at boot through the extension refresh. This is another case where it's good if extensions keep workarounds for late loading.
