We've had this before.. you've got /etc/mtab as a symlink to /proc/mounts,
haven't you?
When mount is used to create a loop device, it attempts to record the
fact that it has done so in /etc/mtab so it knows to delete it on umount.
If /etc/mtab is a symlink to /proc/mounts then this is not possible.
You must therefore use losetup to delete the mount yourself.
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