I encountered this same problem today.
Garbled console text in initramfs for dm-crypt luks encryption prompt.
I am using Arch Linux, but the symptoms are the same as you're describing. I have full disk luks encryption enabled on my Thinkpad laptop. The prompts from dm-crypt in initramfs (and it would seem all console text from initramfs) are garbled, mangled, and unreadable.
The solution on my Thinkpad was to add an intel graphics driver when building the initial RAM disk.
/etc/mkinitcpio.conf
MODULES="i915"
It would appear the answer in Ubuntu may be similar. Add the proper graphics driver when building initramfs. I assume this issue presented itself to you "after a few updates" because one of those updates triggered a rebuild of initramfs without the necessary video driver.
You will most likely need to verify which video driver is necessary for your situation.
See some example articles here explaining how to add modules to initramfs in Ubuntu.
The file /etc/initramfs-tools/modules is used to include modules in initramfs ... If you add any modules name there, you need to run sudo update-initramfs -u command to update your currently used initramfs files.