Upstream Commit 29fe5d7 (released in 1.1.1) introduced a latent problem for any caller of virSecurityManagerSetProcessLabel and where the domain already had a uid:gid label to be parsed. Such a setup would collect the list of supplementary groups during virSecurityManagerPreFork, but then ignores that information, and thus fails to call setgroups() to adjust the supplementary groups of the process.
This issue did not affect the versions of libvirt package as shipped with Red Hat Enterprise Linux 5 and 6.
Created libvirt tracking bugs for this issue:
Affects: fedora-all [bug 1006511]
libvirt-0.10.2.8-1.fc18 has been pushed to the Fedora 18 stable repository. If problems still persist, please make note of it in this bug report.
libvirt-22.214.171.124-2.fc19 has been pushed to the Fedora 19 stable repository. If problems still persist, please make note of it in this bug report.