Puppet is a third-party software and installation on Azure VMs is not something that we have much knowledge about. My recommendation would be reach out to Puppet for help installing.
That being said, I did test and was able to easily install Puppet 7 on my Ubuntu 22.04 VM without errors. Here are the commands I ran to install. I followed the documentation provided by Puppet.
sudo wget https://apt.puppet.com/puppet7-release-jammy.deb
sudo dpkg -i puppet7-release-jammy.deb
sudo apt-get update
sudo bash -l
sudo apt-get install puppetserver
From your error message, it appears that you are utilizing Ubuntu 20.04 (focal). I recommend moving to Ubuntu 22.04 (jammy) or newer as 20.04 will be end of life in 2025.
If you are still facing issues, please reach out to Puppet for assistance. They also do have a slack channel which might be helpful.
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