[confcom] managed-identity env allowlist missing APP_IDENTITY_ENDPOINT

[swibi-ttd]

Describe the bug

We've noticed a newly injected environment variable APP_IDENTITY_ENDPOINT in our confidential container groups that aren't in the current allowlist.

internal_config.json's managedIdentity.environmentVariables currently lists only:

IDENTITY_API_VERSION
IDENTITY_HEADER
IDENTITY_SERVER_THUMBPRINT

(last updated 2026-04-17)

We've recently been seeing our deployments fail with the following error, despite no changes to our ARM template or CCE policy:

{"decision":"deny","reason":{"errors":["invalid env list: APP_IDENTITY_ENDPOINT"]}}

Workaround
Setting allow_environment_variable_dropping := true avoids the failure. Adding explicit env_rules for these variable names to our own containers does not help, as we suspect there are transient Azure-side containers that don't have this whitelisted.

Related command

az confcom

Errors

{"decision":"deny","reason":{"errors":["invalid env list: APP_IDENTITY_ENDPOINT"]}}

Issue script & Debug output

az deployment group create --name operator-control --resource-group $RG --parameters operator.parameters.json  --template-file operator.json
{"status":"Failed","error":{"code":"DeploymentFailed","target":"/subscriptions/XXX/resourceGroups/uid-enclave-test/providers/Microsoft.Resources/deployments/operator-control","message":"At least one resource deployment operation failed. Please list deployment operations for details. Please see https://aka.ms/arm-deployment-operations for usage details.","details":[{"code":"ResourceDeploymentFailure","target":"/subscriptions/XXX/resourceGroups/uid-enclave-test/providers/Microsoft.ContainerInstance/containerGroups/uid-operator-5.70.159-r0-azure-cc-1","message":"The resource write operation failed to complete successfully, because it reached terminal provisioning state 'Failed'.","details":[{"message":"failed to create containerd task: failed to create shim task: failed to create container e23c0e58dd1b4dcf37466e9c9986693c51cffd9dd0c8d762af041058cced4be1: guest RPC failure: container creation denied due to policy: {\"decision\":\"deny\",\"reason\":{\"errors\":[\"invalid env list: APP_IDENTITY_ENDPOINT\"]},\"truncated\":[\"input\"]};The container group provisioning has failed. Refer to 'DeploymentFailedReason' event for more details."}]},{"code":"ResourceDeploymentFailure","target":"/subscriptions/XXX/resourceGroups/uid-enclave-test/providers/Microsoft.ContainerInstance/containerGroups/uid-operator-5.70.159-r0-azure-cc-0","message":"The resource write operation failed to complete successfully, because it reached terminal provisioning state 'Failed'.","details":[{"message":"failed to create containerd task: failed to create shim task: failed to create container 8bcb921f25ca799fd2b6fa34a5505265f232dec0ebd03081efe0efa05d128bcf: guest RPC failure: container creation denied due to policy: {\"decision\":\"deny\",\"reason\":{\"errors\":[\"invalid env list: APP_IDENTITY_ENDPOINT\"]},\"truncated\":[\"input\"]};The container group provisioning has failed. Refer to 'DeploymentFailedReason' event for more details."}]}]}}

Deployment artefacts available here: https://github.com/IABTechLab/uid2-operator/releases/tag/v5.70.159-r0
We also tried adding APP_IDENTITY_ENDPOINT to env_rules but still ran into the same error: https://github.com/IABTechLab/uid2-operator/releases#release-v5.70.159-r4

Expected behavior

The deployment succeeds

Environment Summary

azure-cli 2.88.0 *

core 2.88.0 *
telemetry 1.1.0

Extensions:
resource-graph 2.1.1

Dependencies:
msal 1.36.0
azure-mgmt-resource 24.0.0

Python location '/opt/homebrew/Cellar/azure-cli/2.88.0/libexec/bin/python'
Config directory '/Users/sean.wibisono/.azure'
Extensions directory '/Users/sean.wibisono/.azure/cliextensions'

Python (Darwin) 3.14.6 (main, Jun 10 2026, 10:03:53) [Clang 21.0.0 (clang-2100.0.123.102)]

Legal docs and information: aka.ms/AzureCliLegal

<><><>

also upgraded to 2.90.0 but still seeing the same error message

Additional context

No response

[yonzhan]

Thank you for opening this issue, we will look into it.