When both setting capacityReservationId and Open/None capacityReservationPreference, will get error message as below:

    message: 'admission webhook "validation.awsmachine.infrastructure.cluster.x-k8s.io"
      denied the request: AWSMachine.infrastructure.cluster.x-k8s.io "huliu-aws829a-4nts6-worker-us-east-2aa-p4mz6"
      is invalid: spec.capacityReservationPreference: Forbidden: when a reservation
      ID is specified, capacityReservationPreference may only be `capacity-reservations-only`
      or empty'

But `capacity-reservations-only` is not a valid value, if I set `capacity-reservations-only` for capacityReservationPreference, will get error message as below:

liuhuali@Lius-MacBook-Pro huali-test % oc create -f ms2.yaml 
The AWSMachineTemplate "huliu-aws829a-4nts6-worker-test2" is invalid: 
* spec.template.spec.capacityReservationPreference: Unsupported value: "capacity-reservations-only": supported values: "", "None", "CapacityReservationsOnly", "Open"
* <nil>: Invalid value: "": "spec.template.spec.capacityReservationPreference" must validate all the schemas (allOf). None validated
* <nil>: Invalid value: "null": some validation rules were not checked because the object was invalid; correct the existing errors to complete validation

So `capacity-reservations-only` should be changed to `CapacityReservationsOnly`

By the way, `a reservation ID` should be better changed to `capacityReservationId`

    4.20.0-0.nightly-2025-08-28-071300

    always

    1.Create awsmachinetemplate setting capacityReservationId and Open/None capacityReservationPreference, like 

      capacityReservationPreference: None
      capacityReservationId: cr-0c6b869ee31356e75

liuhuali@Lius-MacBook-Pro huali-test % oc create -f ms2.yaml 
awsmachinetemplate.infrastructure.cluster.x-k8s.io/huliu-aws829a-4nts6-worker-test1 created
liuhuali@Lius-MacBook-Pro huali-test % oc get awsmachinetemplate
NAME                                             AGE
huliu-aws829a-4nts6-worker-test1                 25s
huliu-aws829a-4nts6-worker-us-east-2a-2914f458   112m
huliu-aws829a-4nts6-worker-us-east-2b-e571d075   112m
huliu-aws829a-4nts6-worker-us-east-2c-0704d6c6   112m

    2.Create machineset, will see the error message in the machineset

liuhuali@Lius-MacBook-Pro huali-test % oc create -f ms3.yaml 
machineset.cluster.x-k8s.io/huliu-aws829a-4nts6-worker-us-east-2aa created
liuhuali@Lius-MacBook-Pro huali-test % oc get machineset.c huliu-aws829a-4nts6-worker-us-east-2aa -oyaml
...
status:
  conditions:
  - lastTransitionTime: "2025-08-29T04:22:53Z"
    message: 'admission webhook "validation.awsmachine.infrastructure.cluster.x-k8s.io"
      denied the request: AWSMachine.infrastructure.cluster.x-k8s.io "huliu-aws829a-4nts6-worker-us-east-2aa-9fcxd"
      is invalid: spec.capacityReservationPreference: Forbidden: when a reservation
      ID is specified, capacityReservationPreference may only be `capacity-reservations-only`
      or empty'
    reason: InfrastructureTemplateCloningFailed
    severity: Error
    status: "False"
    type: Ready

     3. Try setting `capacity-reservations-only` for capacityReservationPreference in awsmachinetemplate, get error

      capacityReservationPreference: capacity-reservations-only

liuhuali@Lius-MacBook-Pro huali-test % oc create -f ms2.yaml 
The AWSMachineTemplate "huliu-aws829a-4nts6-worker-test2" is invalid: 
* spec.template.spec.capacityReservationPreference: Unsupported value: "capacity-reservations-only": supported values: "", "None", "CapacityReservationsOnly", "Open"
* <nil>: Invalid value: "": "spec.template.spec.capacityReservationPreference" must validate all the schemas (allOf). None validated
* <nil>: Invalid value: "null": some validation rules were not checked because the object was invalid; correct the existing errors to complete validation 

    error message shows 

    message: 'admission webhook "validation.awsmachine.infrastructure.cluster.x-k8s.io"
      denied the request: AWSMachine.infrastructure.cluster.x-k8s.io "huliu-aws829a-4nts6-worker-us-east-2aa-9fcxd"
      is invalid: spec.capacityReservationPreference: Forbidden: when a reservation
      ID is specified, capacityReservationPreference may only be `capacity-reservations-only`
      or empty'

    `capacity-reservations-only` should be changed to `CapacityReservationsOnly`

`a reservation ID` should be better changed to `capacityReservationId`

    new feature testing for https://issues.redhat.com/browse/OCPCLOUD-3028