@Andrew, thank you again for bringing this issue to our attention.
The Azure Arc team is investigating this issue. We dont have a specific timeline for it to be fixed yet. I will share further updates as I have.
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When trying to assign Machine Configuration in the ARC machine portal GUI it always fails with a ResourceNotFound error.
I guess it is because, when creating Machine Configuration, it always uses Microsoft.Compute/virtualMachines
instead of Microsoft.HybridCompute/machines
in the JSON template type key.
I think this is the problem, because if I manually customize the JSON template to look like this
And deploy it as a custom template, it works and policy gets assigned to the device.
Same goes when creating such assignment via "Guest Assignment" portal.
@Andrew, thank you again for bringing this issue to our attention.
The Azure Arc team is investigating this issue. We dont have a specific timeline for it to be fixed yet. I will share further updates as I have.