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Bug: RequestDisallowedByPolicy is not Retryable #5074

@daftping

Description

@daftping

Describe the bug

When Resources like ResourceGroupPolicyExemption and StorageAccount are applied simultaneously, StorageAccount gets stuck in RequestDisallowedByPolicy and never recovers.

status:
  conditions:
    - lastTransitionTime: '2025-12-09T20:16:43Z'
      message: >-
        Resource '<name>' was disallowed by policy. Policy identifiers:
        '[{"policyAssignment":{"name":"Storage accounts should disable public
        network
        access","id":"/providers/Microsoft.Management/managementGroups/<id>/providers/Microsoft.Authorization/policyAssignments/<id>"},"policyDefinition":{"name":"Storage
        accounts should disable public network
        access","id":"/providers/Microsoft.Authorization/policyDefinitions/<id>","version":"1.0.1"}}]'.
      observedGeneration: 1
      reason: RequestDisallowedByPolicy
      severity: Error
      status: 'False'
      type: Ready

Azure Service Operator Version: v2.16.0

Expected behavior

StorageAccount is eventually reconciled.

To Reproduce

  1. Create a Resource block by Azure Policy
  2. Exampt Resource from the Policy

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