Unfortunately I copied the line from another installation and it worked. As I wasn't concerned about fresh install I didn't focus on a backup.Could you tell us what parameters you had set there? In theory some things like for example moving only a subset of cgroups to v2 *could* work with lxc (but I wouldn't recommend it for production use).
I'm not absolutely sure but I think it was parameter below... I don't know where it came from. Another installation didn't show that setting. The parameter tried to use cgroups v1. That's the reason why I removed as this is not my preferred configuration.
GRUB_CMDLINE_LINUX="systemd.unified_cgroup_hierarchy=0" -- not working
GRUB_CMDLINE_LINUX="" -- working