I added systemd.unified_cgroup_hierarchy=false to hosts’s grub GRUB_CMDLINE_LINUX, rebooted the host and it works now. Ubuntu 16.04 container boots and shutdowns without problems.
Thank you @sdeziel .
Now I would like now to apply the same fix to the production server, but… what are side effects of applying this to a server where newer containers (ubuntu 22.04) are already working? Will I have other problems in the future using this fix?