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As the "unattend.xml" contains <PersistAllDeviceInstalls>true</PersistAllDeviceInstalls>, if the hypervisor hardware you are deploying to is different than the one where you generated the image, this leads to errors during the generalize step. If this is the case, you can remove this entry from the Unattend.xml.

If this is not the case, can you provide more information about your environment(hypervisor/os and cloudbase-init version used), so that we can try to reproduce the issue?