Upgrading a BYOH node is failing, the BYOH node after upgrade remains in NotReady,SchedulingDisabled'

{"level":"error","ts":"2023-06-07T16:52:46Z","msg":"Reconciler error","controller":"configmap","controllerGroup":"","controllerKind":"ConfigMap","ConfigMap":{"name":"windows-instances","namespace":"openshift-windows-machine-config-operator"},"namespace":"openshift-windows-machine-config-operator","name":"windows-instances","reconcileID":"8e6cc51d-9fd4-4e44-b39e-6b6d678c6422","error":"error configuring host with address 10.0.128.7: error deconfiguring instance: unable to remove created directories: unable to remove directory C:\\var\\log, out: Remove-Item : Cannot remove item C:\\var\\log\\containerd\\containerd.log: The process cannot access the file \r\n'containerd.log' because it is being used by another process.\r\nAt line:1 char:27\r\n+ if(Test-Path C:\\var\\log) {Remove-Item -Recurse -Force C:\\var\\log}\r\n+                           ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~\r\n    + CategoryInfo          : WriteError: (containerd.log:FileInfo) [Remove-Item], IOException\r\n    + FullyQualifiedErrorId : RemoveFileSystemItemIOError,Microsoft.PowerShell.Commands.RemoveItemCommand\r\nRemove-Item : Cannot remove item C:\\var\\log\\containerd: The directory is not empty.\r\nAt line:1 char:27\r\n+ if(Test-Path C:\\var\\log) {Remove-Item -Recurse -Force C:\\var\\log}\r\n+                           ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~\r\n    + CategoryInfo          : WriteError: (containerd:DirectoryInfo) [Remove-Item], IOException\r\n    + FullyQualifiedErrorId : RemoveFileSystemItemIOError,Microsoft.PowerShell.Commands.RemoveItemCommand\r\nRemove-Item : Cannot remove item C:\\var\\log: The directory is not empty.\r\nAt line:1 char:27\r\n+ if(Test-Path C:\\var\\log) {Remove-Item -Recurse -Force C:\\var\\log}\r\n+                           ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~\r\n    + CategoryInfo          : WriteError: (C:\\var\\log:DirectoryInfo) [Remove-Item], IOException\r\n    + FullyQualifiedErrorId : RemoveFileSystemItemIOError,Microsoft.PowerShell.Commands.RemoveItemCommand\r\n, err: error running powershell.exe -NonInteractive -ExecutionPolicy Bypass \"if(Test-Path C:\\var\\log) {Remove-Item -Recurse -Force C:\\var\\log}\": Process exited with status 1","stacktrace":"sigs.k8s.io/controller-runtime/pkg/internal/controller.(*Controller).reconcileHandler\n\t/remote-source/build/windows-machine-config-operator/vendor/sigs.k8s.io/controller-runtime/pkg/internal/controller/controller.go:329\nsigs.k8s.io/controller-runtime/pkg/internal/controller.(*Controller).processNextWorkItem\n\t/remote-source/build/windows-machine-config-operator/vendor/sigs.k8s.io/controller-runtime/pkg/internal/controller/controller.go:274\nsigs.k8s.io/controller-runtime/pkg/internal/controller.(*Controller).Start.func2.2\n\t/remote-source/build/windows-machine-config-operator/vendor/sigs.k8s.io/controller-runtime/pkg/internal/controller/controller.go:235"}

Upgrading from:
windows-services-7.0.1-bc9473b         2      6h13m
To:
windows-services-8.0.1-01a3618         2      53m

Most likely, in AWS passed

1. Install a BYOH node server 2022 on GCP (not via machineset)
2. perform upgrade from 7.0.1-bc9473b 4.12 to 4.13 8.0.1-01a3618
3. wait until the upgrade completed

In case machineset node get upgraded BYOH is stuck in NotReady,SchedulingDisabled

Nodes should be in Ready after upgrade with the correct kubelet version

 oc get nodes -owide
NAME                                                        STATUS                        ROLES                  AGE     VERSION                       INTERNAL-IP   EXTERNAL-IP   OS-IMAGE                                                       KERNEL-VERSION                 CONTAINER-RUNTIME
mgcp-byoh-0.c.openshift-qe.internal                         NotReady,SchedulingDisabled   worker                 4h25m   v1.25.0-2653+a34b9e9499e6c3   10.0.128.7    <none>        Windows Server 2022 Datacenter                                 10.0.20348.1726                containerd://1.19
rrasouli-397-x7hdb-master-0.c.openshift-qe.internal         Ready                         control-plane,master   6h55m   v1.26.5+7a891f0               10.0.0.3      <none>        Red Hat Enterprise Linux CoreOS 413.92.202306010245-0 (Plow)   5.14.0-284.16.1.el9_2.x86_64   cri-o://1.26.3-8.rhaos4.13.gitec064c9.el9
rrasouli-397-x7hdb-master-1.c.openshift-qe.internal         Ready                         control-plane,master   6h56m   v1.26.5+7a891f0               10.0.0.5      <none>        Red Hat Enterprise Linux CoreOS 413.92.202306010245-0 (Plow)   5.14.0-284.16.1.el9_2.x86_64   cri-o://1.26.3-8.rhaos4.13.gitec064c9.el9
rrasouli-397-x7hdb-master-2.c.openshift-qe.internal         Ready                         control-plane,master   6h54m   v1.26.5+7a891f0               10.0.0.4      <none>        Red Hat Enterprise Linux CoreOS 413.92.202306010245-0 (Plow)   5.14.0-284.16.1.el9_2.x86_64   cri-o://1.26.3-8.rhaos4.13.gitec064c9.el9
rrasouli-397-x7hdb-worker-a-5872s.c.openshift-qe.internal   Ready                         worker                 6h44m   v1.26.5+7a891f0               10.0.128.3    <none>        Red Hat Enterprise Linux CoreOS 413.92.202306010245-0 (Plow)   5.14.0-284.16.1.el9_2.x86_64   cri-o://1.26.3-8.rhaos4.13.gitec064c9.el9
rrasouli-397-x7hdb-worker-b-fsc8d.c.openshift-qe.internal   Ready                         worker                 6h44m   v1.26.5+7a891f0               10.0.128.2    <none>        Red Hat Enterprise Linux CoreOS 413.92.202306010245-0 (Plow)   5.14.0-284.16.1.el9_2.x86_64   cri-o://1.26.3-8.rhaos4.13.gitec064c9.el9