Hello Annabelle Taylor,
Thanks for your question
If your subnet is shared with other resources, the IPs might not be sufficient for AKS node pools. Karpenter might be trying to launch nodes in a wrong/undersized subnet. Can you verify?
kubectl logs -n karpenter -l app.kubernetes.io/name=karpenter
Also try the troubleshooting steps here: https://learn.microsoft.com/en-us/troubleshoot/azure/azure-kubernetes/create-upgrade-delete/error-code-subnetisfull
You can mark it 'Accept Answer' and 'Upvote' if this helped you
Regards,
Abiola