The useradd-static class did not understand the -P or --clear-password flags. Some example recipes that may be in various projects include these flags, and will trigger an error if present. A simple workaround is to remove the 'meta-skeleton' layer from your project, to avoid the example recipes that trigger this failure.
Configure a project with --all-layers (or enable the meta-skeleton layer) In your local.conf set: USERADDEXTENSION = "useradd-staticids" Attempt a build (of anything).