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I'm not sure that is something that could be "fixed" in 16.04 unless you can convince the Ubuntu kernel maintainers to backport patches for PCI-E hotplug / thunderbolt support.

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LTS releases (like 16.04) get hardware enablement stacks where X/kernel/etc gets upgraded to the versions from the non-LTS releases. So if you make it work with ubuntu 17.04 for example it will trickle down to the LTS users. Makes LTS a much more attractive solution on the desktop. I've stopped bothering with the intermediate ones.

I'm running a kernel that supports PCI-E hotplug & thunderbolt. That's not the issue.

FWIW the kernel in 16.04 does support that. But I've tried with newer kernels too.

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