Unfortunately, I think you need to add back "systemd" for this to build :(
Hi Eric(@Obarun),
I should have mentioned this awhile ago, but I think the main reason qemu hasn't building lately is b/c of removing --systemd ALL before line 333 in the binfmt configuration options section. The two options are 'systemd' or 'debian' (which gentoo/openrc uses), but I couldn't find a way to make the latter work.
In the long run, there may be a creative way to do the binfmts w/o systemd and w/o changing the current build too much, but for now if you add back the offending line I think you'll find that the package will build.
Best, Paul