Description of problem:

When upgrading ACM the MCH "currentVersion" and "desiredVersion" changes basically in an instant to the new version. This happens before all the operators (such as the Observability operator) has been updated to the new version. There is also a period of time where the change to these versions are done and the phase of MCH is "Running".

This makes it impossible for sub-components to understand if MCH is currently in an update state. This causes problems for Observability as described in: https://issues.redhat.com/browse/ACM-20542

Version-Release number of selected component (if applicable):

2.11-2.13 tested

How reproducible:

always

Steps to Reproduce:

1.  Install ACM
2.  Initiate an upgrade to a newer version (only tested y stream updates i.e from 2.11 to 2.12)
3. Keep an eye on the MCH status:

oc get mch multiclusterhub -n open-cluster-management -o yaml

Actual results:

Waiting for upgrade to start:

  currentVersion: 2.12.3
  desiredVersion: 2.12.3
  phase: Running

The upgrade has started and versions are immediately upgraded, everything looks to be completed - no indication that we are not actually finished with the 2.13 upgrade in the status conditions:

  currentVersion: 2.13.3
  desiredVersion: 2.13.3
  phase: Running

Later we see that the phase is changed to Pending

  currentVersion: 2.13.3
  desiredVersion: 2.13.3
  phase: Pending

Expected results:

Waiting for upgrade to start:

  currentVersion: 2.12.3
  desiredVersion: 2.12.3
  phase: Running

Upgrade starts

  currentVersion: 2.12.3
  desiredVersion: 2.13.3
  phase: Pending(?)

Upgrade fully completed and all operators has been upgraded to new image version:

  currentVersion: 2.13.3
  desiredVersion: 2.13.3
  phase: Running

Additional info:

https://redhat-internal.slack.com/archives/CUEMEHRA9/p1749114245078829

-------------------------------------------------------------------------------------------------------
QE Hand Off Template (fill out when moving to Review) 10/15/25:

Summary of the Work:
What was implemented or fixed? Include a brief description of the problem (if applicable) and how it was addressed.
e.g., "Updated the UI to show validation errors for the form. The previous implementation did not surface backend validation issues."

Key Areas to Verify:

1. What functionality should QE focus on? List what was tested or what is most important to validate.
2. Ensure the new validation messages appear for required fields
3. Confirm the workflow still completes as expected after validation fixes
4. Any edge cases or high-risk areas touched by the change

Fix or Feature Availability:
When will this be available in a build?
Code merged on: YYYY-MM-DD
Expected downstream build tag (if known): example-build-tag
(Optional) Related PR(s): Link