Hello CKAU,
It looks like you're trying to use Azure Arc features like Azure RBAC and Custom Locations while disabling the Cluster Connect feature for privacy concerns with your clusters. Unfortunately, based on current Azure Arc functionality, both Custom Locations and Cluster Connect features are interdependent, meaning Custom Locations require Cluster Connect to be enabled.
To answer your query, No. Azure Arc does not currently support disabling Cluster Connect while keeping Custom Locations enabled. These two features are interdependent Custom Locations relies on Cluster Connect for namespace management and service deployment. If you turn off Cluster Connect, Custom Locations will stop working.
Create and manage custom locations on Azure Arc-enabled Kubernetes - Azure Arc | Microsoft Learn
While Azure RBAC works independently for user access, be aware that you cannot use the Custom Locations feature or view Kubernetes resources directly in the Azure Portal without Cluster Connect, as these features have a dependency on the Cluster Connect infrastructure.
However, since if your primary goal is to disable Cluster Connect access and rely on Azure RBAC for private cluster access, this configuration may perfectly meet your security requirement.
Reference document:
Overview of custom locations with Azure Arc - Azure Arc | Microsoft Learn
Hope this helps, if you need further assistance, please reach out to us, Thanks