Thanks to srhb on irc.freenode.net#nixos who helped me do a bit more debugging, we added -vvv to the nix build command in nixos-install and got this output: https://hastebin.com/abuverakat Unfortunately I’m not really able to figure out anything more from this as it still doesn’t give us the command that it’s running that’s failing. Specifically what the actual arguments to the mount command are that we could use to try to diagnose the permissions issue.
Just for funsies we also tried disabling sandboxing by adding nix.useSandbox = false; to /etc/nixos/configuration.nix and running nixos-rebuild switch, then restarted the nix-daemon with pkill nix-daemon and verified the config went through with nix show-config | grep "sandbox =", then ran nixos-install again, but we continued to get the same error. 