This breaks the current Atomic Host qcow2. The likely quick fix is to omit NM_CONTROLLED=no (hence enable it). The better fix would be to change cloud-init back to not writing a network config unless one was provided.
cloud-init-0.7.8-2.fc25 has been pushed to the Fedora 25 testing repository. If problems still persist, please make note of it in this bug report. See https://fedoraproject.org/wiki/QA:Updates_Testing for instructions on how to install test updates. You can provide feedback for this update here: https://bodhi.fedoraproject.org/updates/FEDORA-2016-e96b704c39
cloud-init-0.7.8-2.fc25 has been pushed to the Fedora 25 stable repository. If problems still persist, please make note of it in this bug report.