The cluster-capi-operator controller-runtime manager has multiple controllers.

One controller is responsible for installing the CAPI CRDs.

Another controller sets up a watch to a resource, and that resource is belonging to one of the CRDs that the other controller installs.

As such for a brief period of time we are seeing logs like:
if kind is a CRD, it should be installed before calling Start

which is expected.

What is not expected is that once the CRD gets installed (by the first controller), the manager keeps retrying without finding it, and it eventually fails starting with timed out waiting for cache to be synced, in my case causing the operator to non-zero exit.

Then after the restart the controller is able to Start, find the CRD and setup the Watch.

This is a bug in controller-runtime behaviour:
https://github.com/kubernetes-sigs/controller-runtime/issues/2589

4.17    

Always    

    1.
    2.
    3.
    

    Operator exits 1 and pod restarts once in order to find CRDs

    The CRDs are dynamically found without the need for restarting