Proxmox: PTY allocation request failed

...edit /etc/rc.sysinit and look for this line: /sbin/start_udev
Remove that line and restart the container and you might be good to go!
...This does work but as soon as you run yum if it updates any networking it puts it back in guys: /sbin/start_udev

REF: https://forum.proxmox.com/threads/pty-issue-with-ve-4-containers-converted-from-3.23485/