Qemu - mount_root: no usable overlay filesystem found

I'm trying to use Openwrt 19.07.0 in qemu (ARM 32).
The device does not have any persistent storage - overlay is tmpfs
This is the error that i get during boot:

[    5.073420] mount_root: unable to create loop device
[    5.083436] mount_root: no usable overlay filesystem found, using tmpfs overlay

Same configuration works on any Openwrt 21.xx.x

How can I setup the overlay to be persistent in 19.xx.x over qemu ?