Rancher Server Setup

• Rancher version: v2.7-head 3a42367
• Installation option (Docker install/Helm Chart): Docker install
  • If Helm Chart, Kubernetes Cluster and version (RKE1, RKE2, k3s, EKS, etc): k3s
• Proxy/Cert Details:

Information about the Cluster

• Kubernetes version: v1.25.5+k3s1
• Cluster Type (Local/Downstream): Downstream Infrastructure provider
  • If downstream, what type of cluster? (Custom/Imported or specify provider for Hosted/Infrastructure Provider): Infrastructure Provider 2 nodes - 1 etcd + cp and 1 worker

User Information

• What is the role of the user logged in? (Admin/Cluster Owner/Cluster Member/Project Owner/Project Member/Custom)
  • If custom, define the set of permissions: Standard user and Admin

Describe the bug
When we upgrade the k8s version of na rke2 node driver cluster, the cluster goes into error state from updating state for a few seconds and then go back to updating state

To Reproduce

1. Create a rancher server v2.7-head
2. Log in as a standard user or an admin
3. Create an rke2 node driver cluster from 1.24.11+rke2r1
4. Upgrade the k8s version on the cluster from 1.24.11+rke2r1 to 1.25.7+rke2r1

Result
Notice the cluster goes into error state for a few seconds and come back to updating state with the following error statement

 Cluster health check failed: Failed to communicate with API server during namespace check: Get
      "https://10.43.0.1:443/api/v1/namespaces/kube-system?timeout=45s": dial tp 10.43.0.1:443: connect:
          connection refused

Expected Result
Expected the state to go from updating to active without the error state.

Additional context