The doc https://docs.openshift.com/container-platform/4.16/machine_management/creating_machinesets/creating-machineset-azure.html#machineset-yaml-azure_creating-machineset-azure shows
 
          tags:
            - name: <custom_tag_name> 
              value: <custom_tag_value> 

This is wrong, because I tried on a Azure 4.16 cluster, get error
 
 
liuhuali@Lius-MacBook-Pro huali-test % oc create -f ms1.yaml 
Error from server (Forbidden): error when creating "ms1.yaml": admission webhook "default.machineset.machine.openshift.io" denied the request: providerSpec.value: Invalid value: v1beta1.AzureMachineProviderSpec{TypeMeta:v1.TypeMeta{Kind:"AzureMachineProviderSpec", APIVersion:"azureproviderconfig.openshift.io/v1beta1"}, ObjectMeta:v1.ObjectMeta{Name:"", GenerateName:"", Namespace:"", SelfLink:"", UID:"", ResourceVersion:"", Generation:0, CreationTimestamp:time.Date(1, time.January, 1, 0, 0, 0, 0, time.UTC), DeletionTimestamp:<nil>, DeletionGracePeriodSeconds:(*int64)(nil), Labels:map[string]string(nil), Annotations:map[string]string(nil), OwnerReferences:[]v1.OwnerReference(nil), Finalizers:[]string(nil), ManagedFields:[]v1.ManagedFieldsEntry(nil)}, UserDataSecret:(*v1.SecretReference)(0xc00054c740), CredentialsSecret:(*v1.SecretReference)(0xc00054c780), Location:"eastus", VMSize:"Standard_D4s_v3", Image:v1beta1.Image{Publisher:"", Offer:"", SKU:"", Version:"", ResourceID:"/resourceGroups/huliu-az88b-q96rv-rg/providers/Microsoft.Compute/galleries/gallery_huliu_az88b_q96rv/images/huliu-az88b-q96rv-gen2/versions/latest", Type:""}, OSDisk:v1beta1.OSDisk{OSType:"Linux", ManagedDisk:v1beta1.OSDiskManagedDiskParameters{StorageAccountType:"Premium_LRS", DiskEncryptionSet:(*v1beta1.DiskEncryptionSetParameters)(nil), SecurityProfile:v1beta1.VMDiskSecurityProfile{DiskEncryptionSet:v1beta1.DiskEncryptionSetParameters{ID:""}, SecurityEncryptionType:""}}, DiskSizeGB:128, DiskSettings:v1beta1.DiskSettings{EphemeralStorageLocation:""}, CachingType:""}, DataDisks:[]v1beta1.DataDisk(nil), SSHPublicKey:"", PublicIP:false, Tags:map[string]string(nil), SecurityGroup:"", ApplicationSecurityGroups:[]string(nil), Subnet:"huliu-az88b-q96rv-worker-subnet", PublicLoadBalancer:"", InternalLoadBalancer:"", NatRule:(*int64)(nil), ManagedIdentity:"huliu-az88b-q96rv-identity", Vnet:"huliu-az88b-q96rv-vnet", Zone:"1", NetworkResourceGroup:"", ResourceGroup:"huliu-az88b-q96rv-rg", SpotVMOptions:(*v1beta1.SpotVMOptions)(nil), SecurityProfile:(*v1beta1.SecurityProfile)(nil), UltraSSDCapability:"", AcceleratedNetworking:false, AvailabilitySet:"", Diagnostics:v1beta1.AzureDiagnostics{Boot:(*v1beta1.AzureBootDiagnostics)(nil)}, CapacityReservationGroupID:""}: error unmarshaling JSON: while decoding JSON: json: cannot unmarshal array into Go struct field AzureMachineProviderSpec.tags of type map[string]string 

It should be
 
          tags:
            <custom_tag_key>: <custom_tag_value>

related case for reference:  https://polarion.engineering.redhat.com/polarion/#/project/OSE/workitem?id=OCP-24721 
    

By the way, the apiVersion should change from azureproviderconfig.openshift.io/v1beta1 to machine.openshift.io/v1beta1, because I checked on a 4.16 Azure cluster, it shows machine.openshift.io/v1beta1 in the default compute machine set.

      providerSpec:
        value:
          apiVersion: azureproviderconfig.openshift.io/v1beta1

4.16    

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