[Bug]: Kusto cluster creation fails

[kostapetan]

Is there an existing issue for this?

• I have searched the existing issues

Affected Resource(s)

kusto.azure.upbound.io/v1beta1 - Cluster

Resource MRs required to reproduce the bug

apiVersion: kusto.azure.upbound.io/v1beta1
kind: Cluster
metadata:
annotations:
meta.upbound.io/example-id: kusto/v1beta1/cluster
labels:
testing.upbound.io/example-name: example
name: my-cluster-name
spec:
forProvider:
location: Sweden Central
resourceGroupNameSelector:
matchLabels:
testing.upbound.io/example-name: example
sku:
- capacity: 1
name: Dev(No SLA)_Standard_D11_v2

apiVersion: azure.upbound.io/v1beta1
kind: ResourceGroup
metadata:
name: example-resources-random
labels:
testing.upbound.io/example-name: example
spec:
forProvider:
location: Sweden Central
tags:
provisioner: crossplane

Steps to Reproduce

Apply the manifest above

What happened?

The Cluster CRD is successfully created, however the actual resource in Azure is not created.
Same happens if I manually create the Kusto cluster in Azure, delete it, the reconciliation will fail with the same error message.

Relevant Error Output Snippet

Kusto Cluster Name: "xxx"): unexpected status 404 (404 Not Found) with error: ResourceNotFound: The Resource 'Microsoft.Kusto/clusters/xxx' under resource group 'example-resources-random' was not found. For more details please go to https://aka.ms/ARMResourceNotFoundFix  []}]

Crossplane Version

v1.17.1

Provider Version

v1.7.0

Kubernetes Version

v1.29.9

Kubernetes Distribution

AKS

Additional Info

No response