For starters, I must say that I am no SCCM expert. Shout out to Michael Harding who made this possible with his in-depth SCCM knowledge. Co-managing Windows Devices made it possible to concurrently manage devices using the good old Configuration Manager and
Windows VM get stuck at OOBE Sysprep screen in Azure Cloud
Credit goes to Richard Podd for finding the solution for this – Thanks Rich! Summary Windows VM get stuck at OOBE Sysprep screen in Azure. Boot diagnostics would just show the logon screen as if the OOBE sysprep was successful,