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Confirmation pop-up when executing Format-Partition [CloudBase-Init 1.1.6, Windows Server 2019]

I have a CloudBase-Init that includes the following line of PowerShell:

Get-Disk | Where-Object PartitionStyle -Eq "RAW" | Initialize-Disk -PassThru | New-Partition -AssignDriveLetter -UseMaximumSize | Format-Volume -NewFileSystemLabel "DATA" -FileSystem NTFS -Force

During deployment autologon logs in and I see the following pop-up:

Title: Microsoft Windows
Body:
You need to format the disk in drive E: before you can use it.
Do you want to format it?
[Format disk] [Cancel]

When installing CloudBase-Init I specified that it should run as system. In the same code block as above I output whoami /all to a text file and can confirm that the username is nt authority\system. If I run the above PowerShell after deployment as local Admin I don't get any pop-up or prompts -- it just executes.

How do I fix this?