When we create MC configuring kernel arguments or new extensions the osbuilder pod creates new MOSBs when it it is drained, resulting in the previous MOSB being removed, the image being deleted and the MCP being degraded because it can't find the original osImage manifest.

$ oc get clusterversion
NAME      VERSION                              AVAILABLE   PROGRESSING   SINCE   STATUS
version   4.20.0-0.nightly-2025-06-29-224400   True        False         5h14m   Error while reconciling 4.20.0-0.nightly-2025-06-29-224400: an unknown error has occurred: MultipleErrors

Always

Two ways of reproducing it.

One way of reproducing it:

1. Enable Image Mode in the worker pool
2. Wait until the MOSB is created and the builder pod is running
3. Create a MC configuring kernelargs

apiVersion: machineconfiguration.openshift.io/v1
kind: MachineConfig
metadata:
  labels:
    machineconfiguration.openshift.io/role: worker
  name: test-kernel-arguments-32
spec:
  config:
    ignition:
      version: 3.2.0
  kernelArguments:
    - test


Another way of reproducing it:

1. Enable Image Mode in the worker pool
2. Wait until the osImage is built and applied to all workers
3. Create a MC deploying a new extension 

apiVersion: machineconfiguration.openshift.io/v1
kind: MachineConfig
metadata:
  labels:
    machineconfiguration.openshift.io/role: worker
  name: tc-56131-all-extensions
spec:
  config:
    ignition:
      version: 3.1.0
  extensions:
  - usbguard

The result is that the osBuilder pod generates a  MOSB, and once this MOSB finishes building the osImage, when the osBuilder pod is drained it generates another MOSB too and removes the first one.

Since the first MOSB is removed, its image is garbage collected and removed from the registry, hence the MCP will fail to apply to the nodes and will report a degraded status.

No degradation should happen in those scenarios.

We can see this happening in the regression tests too:
https://qe-private-deck-ci.apps.ci.l2s4.p1.openshiftapps.com/view/gs/qe-private-deck/logs/periodic-ci-openshift-openshift-tests-private-release-4.20-amd64-nightly-vsphere-ipi-longduration-mco-fips-proxy-g2-f14/1939185613580275712

https://qe-private-deck-ci.apps.ci.l2s4.p1.openshiftapps.com/view/gs/qe-private-deck/logs/periodic-ci-openshift-openshift-tests-private-release-4.20-amd64-nightly-baremetalds-ipi-ovn-f14-longrun-mco-p3/1938010861956239360