Azure Update Management does not support PS 7.1 runbooks. PS 7.1 is still in preview. In fact in certain regions there is now PS 7.2 which is also in preview. PS 7.2 will be the version that will be made GA some time in the future. May be after GA PS 7.2 will be an option for Azure Update Management but it is unclear as there is also Update Center which is supposed to replace Azure Update Management when it reaches parity with it.
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@David Walker Hope the information provided is useful. Let me know if you have further questions.