This follows on from bug 979971 but is essentially unrelated to it.
I have been trying to instal U12.04 into an encrypted volume. Bug #979971 details how I am unable to do this on top of (alongside) a Truecrypt encrypted Windows 7 partition and Truecrypt encrypted MBR on /dev/sda and /dev/sda1 and /dev/sda2. So I decided I'd see if I could install U12.04 to a fast external USB drive. That's /dev/sdb but my encrypted previous install is still on /dev/sda5. When I use the 12.04 alternate i386 installer it allows me to create a LUKS encrypted partition on /dev/sdb5 but I can't activate it as every time I go to "activate existing encrypted volumes" the installer prompts me for the passphrase for the on /dev/sda5 but not for the new one on /dev/sdb5 so I can't get to create a usable encrypted volume there. Stymied again.
I admit that this is probably a seriously rare ask of the installer but I think it's a clear bug that you can't do it.
I just ran into this same issue.