The createUser function was modified to use kwargs instead of explicit arguments. It checks to see if various attributes are in the kwargs or not, using that logic to set the homedir to the user specified homedir or the default /home
The problem is that pykickstart sets all of these to defaults like "" and False. So the attributes will always be set. So createUser needs to check for values in addition to the attribute's existance in kwargs.
The work-around is to specify all of the various settings for the kickstart user command.
anaconda-16.19-1.fc16 has been submitted as an update for Fedora 16.
anaconda-16.19-1.fc16 has been pushed to the Fedora 16 stable repository. If problems still persist, please make note of it in this bug report.