AzureMachinePoolMachine.Status.LatestModelApplied is never set

[mweibel]

/kind bug

What steps did you take and what happened:
When debugging an unrelated issue, I noticed that none of my AzureMachinePoolMachines have Status.LatestModelApplied set.
Example of a currently running VM:

apiVersion: infrastructure.cluster.x-k8s.io/v1beta1
kind: AzureMachinePoolMachine
metadata:
  creationTimestamp: "2025-04-07T10:13:30Z"
  finalizers:
  - azuremachinepoolmachine.infrastructure.cluster.x-k8s.io
  generation: 1
  labels:
    REDACTED: owned
    azuremachinepool.infrastructure.cluster.x-k8s.io/machine-pool: REDACTED
    cluster.x-k8s.io/cluster-name: REDACTED
    cluster.x-k8s.io/pool-name: REDACTED
  name: REDACTED-593
  namespace: supplier-azure
  ownerReferences:
  - apiVersion: infrastructure.cluster.x-k8s.io/v1beta1
    blockOwnerDeletion: true
    kind: AzureMachinePool
    name: REDACTED
    uid: 3bfdf0b5-55dd-4f05-83cf-7d190eddcb59
  - apiVersion: cluster.x-k8s.io/v1beta1
    blockOwnerDeletion: true
    controller: true
    kind: Machine
    name: REDACTED-593
    uid: 6852404b-8436-4bcc-8790-2637b5d25333
  resourceVersion: "2621480957"
  uid: 8b8354af-feba-453c-9c64-1a40b7cdbf59
spec:
  instanceID: "593"
  providerID: azure:///subscriptions/REDACTED/resourceGroups/REDACTED/providers/Microsoft.Compute/virtualMachineScaleSets/REDACTED/virtualMachines/593
status:
  conditions:
  - lastTransitionTime: "2025-04-07T10:15:42Z"
    status: "True"
    type: Ready
  - lastTransitionTime: "2025-04-07T10:15:42Z"
    status: "True"
    type: BootstrapSucceeded
  - lastTransitionTime: "2025-04-07T10:15:42Z"
    status: "True"
    type: NodeHealthy
  nodeRef:
    name: REDACTED
    uid: ad0a49d3-19c4-46b0-a2e4-b6a8523c063a
  provisioningState: Succeeded
  ready: true
  version: REDACTED

LatestModelApplied is updated as part of the normal reconciliation:

cluster-api-provider-azure/azure/scope/machinepoolmachine.go

Lines 402 to 410 in b18718c

	if s.instance != nil {
	s.AzureMachinePoolMachine.Status.ProvisioningState = &s.instance.State
	hasLatestModel, err := s.hasLatestModelApplied(ctx)
	if err != nil {
	return errors.Wrap(err, "failed to determine if the VMSS instance has the latest model")
	}
	s.AzureMachinePoolMachine.Status.LatestModelApplied = hasLatestModel
	}

But seems like it's never stored in AMPM. I'm not yet sure if there's something off with my installation - will need to verify this once I got some more time.

What did you expect to happen:
Property is set correctly.

Anything else you would like to add:
Additionally, two other things I noticed:

• MachinePool requeues reconciliation if not all instances have the latest model set. However, the check does not use AMPM.Status.LatestModelApplied but instead reimplements the Image equal check. IMO this should use the .Status.LatestModelApplied, too
• VMSS VMs have properties.latestModelApplied as a property. Why don't we use this property instead of comparing the VM.Image with the VMSS.Image?

Environment:

• cluster-api-provider-azure version: latest main (dev env) / v1.17.2 (prod)
• Kubernetes version: (use kubectl version): 1.31.x
• OS (e.g. from /etc/os-release): linux/windows