There was a regression introduced in the Port pkghandler.preserve_only_rhel_kernel() to Action framework PR. The update of the RHEL kernel is called in a wrong place, not being able to update said package and causing an outdated kernel to be set as a default after the conversion.
Breakdown of what's going on:

1. installed original kernel(a) version == latest RHEL kernel(b) version
2. RHEL kerne(b)l cannot be replaced/installed during the main transaction due to the conflicting version
3. we try to install an older version of the kernel(c)
4. update of the kernel(c) is attempted unsuccessfully because the latest version is already (read still) installed in the form of the original vendor kernel(a)
5. the conflicting original kernel(a) is removed
6. an older kernel(c) is set as a default

In reality, steps 4 and 5 should be the other way around.

This line is the suspected culprit.

A log example https://artifacts.osci.redhat.com/testing-farm/a4cb22b9-1a39-4bba-8cda-9fb786dbf350/work-host-meteringirhhf1f0/plans/tier1/destructive/host-metering/execute/data/guest/default-0/tests/integration/tier1/destructive/host-metering/test_host_metering_conversion-1/output.txt