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Description of problem:
If you update systemd on RHEL-7.2 box to version from RHEL-7.3 and then as a separate yum command update the selinux policy systemd will start generating USER_AVC denials and will start returning "Access Denied" errors to DBus clients. IOW, most systemctl commands (start/stop/status) will return "Access Denied".

Version-Release number of selected component (if applicable):
selinux-policy-3.13.1-102

How reproducible:
always

Steps to Reproduce:
1. provision RHEL-7.2 box 
2. yum update -y systemd
3. yum update -y selinux-policy
4  systemctl start reboot.target (attempt to reboot the machine)

Actual results:
systemctl returns access denied error.

Expected results:
No error is returned and machine is cleanly rebooted.

Additional info:
Versions before update on RHEL-7.2 systemd-219-19, selinux-policy-3.13.1-60.el7

Note that explicit "systemctl daeamon-rexec" after selinux-policy update mitigates the problem. I think that as a temporary fix we should re-execute systemd from %post installation script in selinux-policy package.

Did you update a RHEL-7.2 machine to RHEL-7.3 without updating selinux-policy* packages? Do I understand the issue correctly?

The only USER_AVC, which appears before reboot, looks this way:
----
type=USER_AVC msg=audit(11/10/2016 04:20:57.006:289) : pid=1 uid=root auid=unset ses=unset subj=system_u:system_r:init_t:s0 msg='avc:  denied  { start } for auid=root uid=root gid=root path=/usr/lib/systemd/system/reboot.target cmdline="reboot" scontext=unconfined_u:unconfined_r:unconfined_t:s0-s0:c0.c1023 tcontext=system_u:object_r:power_unit_file_t:s0 tclass=service  exe=/usr/lib/systemd/systemd sauid=root hostname=? addr=? terminal=?' 
----

The more interesting thing is that the machine does not reboot when you run the reboot command as root insteaf of step 4.

Since the problem described in this bug report should be
resolved in a recent advisory, it has been closed with a
resolution of ERRATA.

For information on the advisory, and where to find the updated
files, follow the link below.

If the solution does not work for you, open a new bug report.

https://access.redhat.com/errata/RHBA-2017:1861