Comment 18 for bug 794315

Note that the profile is sourced at the top of /usr/sbin/lightdm-session, and the bottom of lightdm-session runs everything in /etc/X11/Xsession.d. The final file is 99x11-common_start, which is exec $STARTUP. Thus this never returns to the exec in lightdm-session. Since 99upstart (from upstart package, so pretty much always present) smashes STARTUP to "init --user", the X session is actually started by upstart--which does not pass through the environment so carefully established in lightdm-session (see "Job environment" in init(5)).

Consensus on askubuntu ( http://askubuntu.com/search?q=profile.d ) seems to be "a graphical login shell is not a login shell," which basically requires the treatment of every new terminal window as a new "login shell" if there's to be a rational environment in there. If this was ever considered a bug, it appears to have reverted now.

I've been digging through this specifically on Xubuntu 14.04, but again, the players involved seem to be pretty deep in the stack.