Adding some additional details here, we were able to identify that this issue is not just limited to RHEL8.7, but also can be observed in RHEL8.6. The root cause emerges from the cloud-init source code with rhel. Looking at cloud-init releases for rhel in https://git.centos.org/rpms/cloud-init/releases, we saw the introduction of this systemd After= condition here (https://git.centos.org/rpms/cloud-init/blob/e2481008492b618ff37907f88dc718d0a2154724/f/SOURCES/0007-Remove-race-condition-between-cloud-init-and-Network.patch) to prevent the NetworkManager/cloud-init race condition, and its subsequent removal here (https://git.centos.org/rpms/cloud-init/blob/6af34fd764c66bb42d83d6fb706b92a1cd50cec1/f/SOURCES/ci-Remove-rhel-specific-files.patch). We have identified the issue to affect cloud-init versions >cloud-init-22.1-1.el8 (https://git.centos.org/rpms/cloud-init/c/1992bd68fc512e22df783ff955edccbad66dbd60?branch=c8s). We recommend updating the systemd service template for cloud-init to account for this additional After= condition.
Adding some additional details here, we were able to identify that this issue is not just limited to RHEL8.7, but also can be observed in RHEL8.6. The root cause emerges from the cloud-init source code with rhel. Looking at cloud-init releases for rhel in https:/ /git.centos. org/rpms/ cloud-init/ releases, we saw the introduction of this systemd After= condition here (https:/ /git.centos. org/rpms/ cloud-init/ blob/e248100849 2b618ff37907f88 dc718d0a2154724 /f/SOURCES/ 0007-Remove- race-condition- between- cloud-init- and-Network. patch) to prevent the NetworkManager/ cloud-init race condition, and its subsequent removal here (https:/ /git.centos. org/rpms/ cloud-init/ blob/6af34fd764 c66bb42d83d6fb7 06b92a1cd50cec1 /f/SOURCES/ ci-Remove- rhel-specific- files.patch). We have identified the issue to affect cloud-init versions >cloud- init-22. 1-1.el8 (https:/ /git.centos. org/rpms/ cloud-init/ c/1992bd68fc512 e22df783ff955ed ccbad66dbd60? branch= c8s). We recommend updating the systemd service template for cloud-init to account for this additional After= condition.