See the man page for
The file /etc/issue is a text file which contains a message or system identification to be printed before the login prompt. It may contain various @char and \char sequences, if supported by the getty-type program employed on the system.
So the following
mingetty sequences can be used...
\d insert current day (localtime),
\l insert line on which mingetty is running,
\m inserts machine architecture (uname -m),
\n inserts machine’s network node hostname (uname -n),
\o inserts domain name,
\r inserts operating system release (uname -r),
\t insert current time (localtime),
\s inserts operating system name,
\u The current number of users which are currently logged in
\U Same as \u but inserts "n users"
\v Inserts operating system version (uname -v).
As far as /etc/issue goes and it showing Ubuntu: the file is not related to the desktop session and it is a text file you can manually alter with
nano. Could be considered a bug if you did not change it yourself but it could also be considered a user file that should be left to the user to change.