Thank you for the details. Based on your response, it seems the issue might be related to the Azure VM Agent not re-initializing properly after cloning. You can try reinstalling the Azure VM Agent by downloading the latest version from the Azure VM Agent GitHub page or by running the following PowerShell command:
Set-Service -Name "WindowsAzureGuestAgent" -StartupType Automatic
Start-Service -Name "WindowsAzureGuestAgent"
Also, ensure that the WindowsAzureGuestAgent service is set to automatic and running, which you can verify through the Services panel or by running:
Get-Service -Name "WindowsAzureGuestAgent"
Please refer to below screenshot:
When using Sysprep, make sure you're using the /generalize and /oobe options, and that the process completes without errors. If the agent still doesn’t start, you can check the logs at C:\WindowsAzure\Logs\WaAppAgent.log for any specific error messages.
Since you are cloning via snapshot and creating a VM image version, you might want to try creating a custom image of the VM before cloning, as this method could provide a more reliable process.
For more details, please refer to the below documentation:
Azure VM Agent Overview
Sysprep (Generalize) a Windows installation
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