I see our internal team has mentioned the below steps as a probable solution to this issue:
In order for the quest configuration to work properly you need to have the Guest Configuration Extension enabled on the machine
Below is the name of the definition which is pushing the extension
· Deploy prerequisites to enable Guest Configuration policies on virtual machines
Afterwards you need to have a managed identity which is going to authenticate the machine as it reads and writes to the Guest Configuration service.
· Add system-assigned managed identity to enable Guest Configuration assignments
· AND
· Deploy the Windows Guest Configuration extension to enable Guest Configuration assignments on Windows VMs
After you have these in place, run the remediation tasks for the non compliant resource.
· Remediate non-compliant resources - Azure Policy | Microsoft Learn
If you have everything ok till this point, run a policy scan on that resource as in the below docs (note that the Policy blade take 24 h to refresh, while forcing the scan you should see it in less than 20 minutes)
Please let us know if following these steps help you resolve your issue. Thank you!