Progress! "Authentication failure" right after an autologin usually comes from PAM, not from the getty config. Things worth checking on the stick:
- passwd -S skysigner: an account that is locked or expired gets refused even with autologin
- the shell in /etc/passwd actually exists on the image
- the home directory exists and belongs to skysigner
- journalctl -b (or /var/log/auth.log) shows which PAM module said no