Environment:
OCP 4.1.18
Serverless 1.1.0 (used images from Brew, rebuilt on Oct 15)
Service Mesh 1.0.1 (installed via operator)

Reproduce issue:

• Install OCP, Service Mesh, Serverless
• Add a non-existing namespace to SMMR: (for example myproject)
  oc edit smmr -n istio-system default
• create new project myproject
  oc new-project myproject
• immediately create a new service in this namespace
  kn service create svc1 --image gcr.io/knative-samples/helloworld-go
• watch status of the service in another terminal:
  watch kn service list -n myproject

First, the service is waiting for Revision to become ready: (expected)
RevisionMissing : Configuration "svc1" is waiting for a Revision to become ready

Then the service is waiting for up to several minutes for VirtualService to be ready (not expected)
Unknown Uninitialized : Waiting for VirtualService to be ready

The service eventually becomes ready. 

Notes:

• issue does not depend on kn client (service can be created by oc apply..)
• issue does not occur when another service is created in the same namespace (i.e. the second service is not created immediately after the ns is created)
• issue does not occur when there is long enough delay between creating ns and deploying the service
• this affects kn client TS as the kn service create command timeouts after 60s by default