CoreOS ignition unique boot error when booting on Azure Confidential VMs

CoreOS boot fails when hosted on Azure Confidential VM (VM size: Standard_DC16ads_v5).

Red Hat Enterprise Linux CoreOS 414.92.202308100510-0

Always.

1. Build the OpenShift installer binary from the master branch (any commit after https://github.com/openshift/installer/commit/a5f0921f0956c8e07232b46614f896583b610536 will do)

$ git clone git@github.com:openshift/installer.git && cd installer/

# build the openshift-install binary, it's created under ./bin/openshift-install
$ ./hack/build.sh

2. Create an OpenShift cluster on Azure with Azure Confidential VMs as control-plane nodes, using the rhcos-414.92.202308100510-0 OS image. 

$ mkdir test-cluster

# create an install-config.yaml with the following controlPlane section and put it under the test-cluster/ dir

controlPlane:
  architecture: amd64
  hyperthreading: Enabled
  name: master
  platform:
    azure:
      type: Standard_DC16ads_v5
      settings:
        securityType: ConfidentialVM
        confidentialVM:
          uefiSettings:
            secureBoot: Disabled
            virtualizedTrustedPlatformModule: Enabled
      osDisk:
        diskSizeGB: 1024
        securityProfile:
          securityEncryptionType: VMGuestStateOnly
  replicas: 3

# run the openshift installer
$ OPENSHIFT_INSTALL_OS_IMAGE_OVERRIDE=https://rhcos.blob.core.windows.net/imagebucket/rhcos-414.92.202308100510-0-azure.x86_64.vhd \
OPENSHIFT_INSTALL_RELEASE_IMAGE_OVERRIDE=registry.ci.openshift.org/ocp/release:4.14.0-0.ci-2023-08-20-221659 \
./bin/openshift-install create cluster --dir ./test-cluster --log-level debug
  
3. Wait for the bootstrap and optionally control-plane nodes to be created.

4. Check the boot log of the bootstrap (or any control-plane node).

Bootstrap (or any control-plane node) boot logs:
...
------
Ignition has failed. Please ensure your config is valid. Note that only
Ignition spec v3.0.0+ configs are accepted.

A CLI validation tool to check this called ignition-validate can be
downloaded from GitHub:
    https://github.com/coreos/ignition/releases
------

Displaying logs from failed units: coreos-ignition-unique-boot.service
Aug 10 15:15:01 systemd[1]: Starting CoreOS Ensure Unique Boot Filesystem...
Aug 10 15:15:03 rdcore[1246]: blkid: error: /dev/sr0: No such file or directory
Aug 10 15:15:03 rdcore[1246]: Error: "blkid" "-p" "/dev/sdb1" "/dev/sr0" "/dev/sda4" "/dev/sda2" "/dev/sda3" "/dev/sda1" failed with exit status: 2
Aug 10 15:15:03 systemd[1]: coreos-ignition-unique-boot.service: Main process exited, code=exited, status=1/FAILURE
Aug 10 15:15:03 systemd[1]: coreos-ignition-unique-boot.service: Failed with result 'exit-code'.
Aug 10 15:15:03 systemd[1]: Failed to start CoreOS Ensure Unique Boot Filesystem.
Aug 10 15:15:03 systemd[1]: coreos-ignition-unique-boot.service: Triggering OnFailure= dependencies.

Generating "/run/initramfs/rdsosreport.txt"


Entering emergency mode. Exit the shell to continue.
Type "journalctl" to view system logs.
You might want to save "/run/initramfs/rdsosreport.txt" to a USB stick or /boot
after mounting them and attach it to a bug report.
...

The bootstrap and control-plane VMs should boot without any errors.