Actually, it fails because ostree-prepare-root is looking for /sysroot//ostree/boot.0/default/dd1e236e145f30318cc828a12f86eda9212bbf65f2bc98938451c97c05fdc02b/0 where the ostree/boot.1.1 containes other trees
$ ls -l /tmp/mnt/root/ostree/boot.1.1/default
total 0
drwxr-xr-x. 1 root root 2 Jun 2 17:08 10c83f4b746fb3e785540edbfd4c85c350246f3b40f2d00424b0125c5168c1ac
drwxr-xr-x. 1 root root 2 Jun 2 17:08 87261a5fd4130582614ab002893ffba7ca3bfadba54b784ba65ec3c0dfbebfd6
I was about to write that I should focus on getting boot.1 to boot when I restarted and tried to boot it again just out of sanity… and to my surprise it booted!
Now I have to fix OSTree, because rpm-ostree status errors out.
$ rpm-ostree status
error: Loading sysroot: Failed to invoke RegisterClient: GDBus.Error:org.freedesktop.DBus.Error.NameHasNoOwner: Could not activate remote peer 'org.projectatomic.rpmostree1': startup job failed