Launched CAPI based installation on azure platform, the default HyperVGeneration on each master node is V1, the expected value should be V2 if instance type supports HyperVGeneration V2.
$ az vm get-instance-view --name jimadisk01-xphq8-master-0 -g jimadisk01-xphq8-rg --query 'instanceView.hyperVGeneration' -otsv
V1

Also, if setting instance type to Standard_DC4ds_v3 that only supports HyperVGeneration V2, 
install-config:
========================
controlPlane:
  architecture: amd64
  hyperthreading: Enabled
  name: master
  platform:
    azure:
      type: Standard_DC4ds_v3


continued to create cluster, installer failed and was timeout when waiting for machine provision.

INFO Waiting up to 15m0s (until 6:46AM UTC) for machines [jimadisk-nmkzj-bootstrap jimadisk-nmkzj-master-0 jimadisk-nmkzj-master-1 jimadisk-nmkzj-master-2] to provision... 
ERROR failed to fetch Cluster: failed to generate asset "Cluster": failed to create cluster: control-plane machines were not provisioned within 15m0s: client rate limiter Wait returned an error: context deadline exceeded 
INFO Shutting down local Cluster API control plane... 
INFO Stopped controller: Cluster API              
WARNING process cluster-api-provider-azure exited with error: signal: killed 
INFO Stopped controller: azure infrastructure provider 
INFO Stopped controller: azureaso infrastructure provider 

In openshift-install.log, got below error:
time="2024-06-25T06:42:57Z" level=debug msg="I0625 06:42:57.090269 1377336 recorder.go:104] \"failed to reconcile AzureMachine: failed to reconcile AzureMachine service virtualmachine: failed to create or update resource jimadisk-nmkzj-rg/jimadisk-nmkzj-master-2 (service: virtualmachine): PUT https://management.azure.com/subscriptions/53b8f551-f0fc-4bea-8cba-6d1fefd54c8a/resourceGroups/jimadisk-nmkzj-rg/providers/Microsoft.Compute/virtualMachines/jimadisk-nmkzj-master-2\\n--------------------------------------------------------------------------------\\nRESPONSE 400: 400 Bad Request\\nERROR CODE: BadRequest\\n--------------------------------------------------------------------------------\\n{\\n  \\\"error\\\": {\\n    \\\"code\\\": \\\"BadRequest\\\",\\n    \\\"message\\\": \\\"The selected VM size 'Standard_DC4ds_v3' cannot boot Hypervisor Generation '1'. If this was a Create operation please check that the Hypervisor Generation of the Image matches the Hypervisor Generation of the selected VM Size. If this was an Update operation please select a Hypervisor Generation '1' VM Size. For more information, see https://aka.ms/azuregen2vm\\\"\\n  }\\n}\\n--------------------------------------------------------------------------------\\n\" logger=\"events\" type=\"Warning\" object={\"kind\":\"AzureMachine\",\"namespace\":\"openshift-cluster-api-guests\",\"name\":\"jimadisk-nmkzj-master-2\",\"uid\":\"c2cdabed-e19a-4e88-96d9-3f3026910403\",\"apiVersion\":\"infrastructure.cluster.x-k8s.io/v1beta1\",\"resourceVersion\":\"1600\"} reason=\"ReconcileError\""
time="2024-06-25T06:42:57Z" level=debug msg="E0625 06:42:57.090701 1377336 controller.go:329] \"Reconciler error\" err=<"
time="2024-06-25T06:42:57Z" level=debug msg="\tfailed to reconcile AzureMachine: failed to reconcile AzureMachine service virtualmachine: failed to create or update resource jimadisk-nmkzj-rg/jimadisk-nmkzj-master-2 (service: virtualmachine): PUT https://management.azure.com/subscriptions/53b8f551-f0fc-4bea-8cba-6d1fefd54c8a/resourceGroups/jimadisk-nmkzj-rg/providers/Microsoft.Compute/virtualMachines/jimadisk-nmkzj-master-2"
time="2024-06-25T06:42:57Z" level=debug msg="\t--------------------------------------------------------------------------------"
time="2024-06-25T06:42:57Z" level=debug msg="\tRESPONSE 400: 400 Bad Request"
time="2024-06-25T06:42:57Z" level=debug msg="\tERROR CODE: BadRequest"
time="2024-06-25T06:42:57Z" level=debug msg="\t--------------------------------------------------------------------------------"
time="2024-06-25T06:42:57Z" level=debug msg="\t{"
time="2024-06-25T06:42:57Z" level=debug msg="\t  \"error\": {"
time="2024-06-25T06:42:57Z" level=debug msg="\t    \"code\": \"BadRequest\","
time="2024-06-25T06:42:57Z" level=debug msg="\t    \"message\": \"The selected VM size 'Standard_DC4ds_v3' cannot boot Hypervisor Generation '1'. If this was a Create operation please check that the Hypervisor Generation of the Image matches the Hypervisor Generation of the selected VM Size. If this was an Update operation please select a Hypervisor Generation '1' VM Size. For more information, see https://aka.ms/azuregen2vm\""
time="2024-06-25T06:42:57Z" level=debug msg="\t  }"
time="2024-06-25T06:42:57Z" level=debug msg="\t}"
time="2024-06-25T06:42:57Z" level=debug msg="\t--------------------------------------------------------------------------------"

4.17.0-0.nightly-2024-06-23-145410    

 Always   

    1. set instance type to Standard_DC4ds_v3 which only supports HyperVGeneration V2 or without instance type setting in install-config 
    2. launched installation
    3.
    

 1. without instance type setting, default HyperVGeneraton on each master instances is V1
 2. fail to create master instances with instance type to Standard_DC4ds_v3    

1. without instance type setting, default HyperVGeneraton on each master instances is V2.
2. succeed to create cluster with instance type Standard_DC4ds_v3