@Yugandhar Firstly, apologies for the delay in responding here and any inconvenience this issue may have caused.
Context on default behavior: When you does not explicitly request managed disks for the OS, AKS will default to ephemeral OS if possible for a given node pool configuration.
When using ephemeral OS, the OS disk must fit in the VM cache. The sizes for VM cache are available in the Azure documentation in parentheses next to IO throughput ("cache size in GiB").
Using the AKS default VM size Standard_DS2_v2 with the default OS disk size of 100GB as an example, this VM size supports ephemeral OS but only has 86GB of cache size. This configuration would default to managed disks if the user does not specify explicitly. If a user explicitly requested ephemeral OS, they would receive a validation error.
If you requests the same Standard_DS2_v2 with a 60GB OS disk, this configuration would default to ephemeral OS: the requested size of 60GB is smaller than the maximum cache size of 86GB.
Using Standard_D8s_v3 with 100GB OS disk, this VM size supports ephemeral OS and has 200GB of cache space. If a user does not specify the OS disk type, the node pool would receive ephemeral OS by default.
For more information: refer here https://learn.microsoft.com/en-us/azure/aks/cluster-configuration#ephemeral-os
Currently the Portal does not support explicitly mentioning the nodeOsDiskType. To explicitly mention --node-os-disk-type as Managed or Ephemeral you can use the Azure CLI, reference article : https://learn.microsoft.com/en-us/cli/azure/aks?view=azure-cli-latest#az_aks_create
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Hope this helps!
Kindly let us know if the above helps or you need further assistance on this issue.
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