Description of Problem

• Describe the bug

The newly introduced Policy/policy.open-cluster-management.io resource healthcheck is showing the Progressing state, even when a policy does not apply to any clusters. This is incorrect and it makes the whole application in Progressing state even though there is nothing to progress since the policy will never apply to any cluster.

To Reproduce

Just create a policy with a placementrule that does not match any existing cluster imported in ACM.
For example: https://gist.github.com/mbaldessari/f3f090ab7fabc904d2038379f61ad312

Expected behavior

The policy should be in healthy state as there is nothing to do

Additional Info

• This is closed and cherrypicked upstream in https://github.com/argoproj/argo-cd/issues/21296
• https://github.com/argoproj/argo-cd/pull/21594
• This is blocking automated cluster deployments using validated patterns.

Reproducibility

• Always

Prerequisites/Environment

• OpenShift 4.14 or greater, RHACM, OpenShift GitOps 1.15