ci-entrypoint failing with Windows VMExtension

[mboersma]

Which jobs are failing:

pull-cluster-api-provider-azure-ci-entrypoint

Which tests are failing:

Since when has it been failing:

Testgrid link:

https://prow.k8s.io/view/gs/kubernetes-ci-logs/pr-logs/pull/kubernetes-sigs_cluster-api-provider-azure/5656/pull-cluster-api-provider-azure-ci-entrypoint/1927004667343015936

Reason for failure (if possible):

E0526 14:35:53.223890       1 controller.go:316] "Reconciler error" err=<
	failed to reconcile AzureMachine: failed to reconcile AzureMachine service vmextensions: extension state failed. This likely means the Kubernetes node bootstrapping process failed or timed out. Check VM boot diagnostics logs to learn more: failed to create or update resource capz-6r0t1d/CAPZ.Windows.Bootstrapping (service: vmextensions): GET https://management.azure.com/subscriptions/46678f10-4bbb-447e-98e8-d2829589f2d8/providers/Microsoft.Compute/locations/CanadaCentral/operations/6c2b9333-cf6e-4197-b4a8-40e16dcf065e
	--------------------------------------------------------------------------------
	RESPONSE 200: 200 OK
	ERROR CODE: OSProvisioningClientError
	--------------------------------------------------------------------------------
	{
	  "startTime": "2025-05-26T14:31:59.4922958+00:00",
	  "endTime": "2025-05-26T14:35:38.7402499+00:00",
	  "status": "Failed",
	  "error": {
	    "code": "OSProvisioningClientError",
	    "message": "OS Provisioning for VM 'capz-6r0t-d957w' did not finish in the allotted time. However, the VM guest agent was detected running. This suggests the guest OS has not been properly prepared to be used as a VM image (with CreateOption=FromImage). To resolve this issue, either use the VHD as is with CreateOption=Attach or prepare it properly for use as an image:\r\n * Instructions for Windows: https://learn.microsoft.com/azure/virtual-machines/windows/prepare-for-upload-vhd-image\r\n * Instructions for Linux: https://learn.microsoft.com/azure/virtual-machines/linux/create-upload-generic "
	  },
	  "name": "6c2b9333-cf6e-4197-b4a8-40e16dcf065e"
	}
	--------------------------------------------------------------------------------
 > controller="azuremachine" controllerGroup="infrastructure.cluster.x-k8s.io" controllerKind="AzureMachine" AzureMachine="default/capz-6r0t1d-md-win-kwqm4-d957w" namespace="default" name="capz-6r0t1d-md-win-kwqm4-d957w" reconcileID="2fbff959-eca5-4ca0-8320-eac0e46df8af"

Anything else we need to know:

/kind failing-test

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