[WIP] Upgrade CAPI to 1.8.8

[nawazkh]

What type of PR is this?
/kind cleanup

What this PR does / why we need it:

• This PR builds on Bump CAPI to v1.8.8 #5331
• This PR is testing if the upgrade test is failing due to a timeout issue as referenced here: Bump CAPI to v1.8.8 #5331 (comment)
• This PR is pulling nawazkh's CAPI fork with updated timeout to 10m instead of 1m to see if that solves the upgrade issue.

Which issue(s) this PR fixes (optional, in fixes #<issue number>(, fixes #<issue_number>, ...) format, will close the issue(s) when PR gets merged):
Fixes N/A

Special notes for your reviewer:

TODOs:

• squashed commits
• includes documentation
• adds unit tests
• cherry-pick candidate

Release note:

NONE

[k8s-ci-robot]

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[k8s-ci-robot]

@nawazkh: The following tests failed, say /retest to rerun all failed tests or /retest-required to rerun all mandatory failed tests:

Test name	Commit	Details	Required	Rerun command
pull-cluster-api-provider-azure-e2e	89049a9	link	true	/test pull-cluster-api-provider-azure-e2e
pull-cluster-api-provider-azure-e2e-aks	89049a9	link	true	/test pull-cluster-api-provider-azure-e2e-aks
pull-cluster-api-provider-azure-test	5f04ccf	link	true	/test pull-cluster-api-provider-azure-test
pull-cluster-api-provider-azure-apiversion-upgrade	5f04ccf	link	true	/test pull-cluster-api-provider-azure-apiversion-upgrade

Full PR test history. Your PR dashboard. Please help us cut down on flakes by linking to an open issue when you hit one in your PR.

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[nawazkh]

I think we can abandon this PR and focus on #5369 for testing since the ultimate aim is to merge CAPI v1.9.3 with CAPZ main.
However, I think the issue is not with the timeout, since the upgrade tests is erroring out with a 600 second timeout too.
ref:

[FAILED] Timed out after 600.000s.
  Unexpected error:
      <errors.aggregate | len:1, cap:1>: 
      admission webhook "default.azuremachinepool.infrastructure.cluster.x-k8s.io" denied the request: failed to set default managed identity defaults: failed to find parent machine pool: failed to find parent MachinePool: failed to get MachinePool for clusterctl-upgrade-workload-t2kpxs-mp-0
      [
          <*errors.StatusError | 0xc000ee0460>{
              ErrStatus: {
                  TypeMeta: {Kind: "Status", APIVersion: "v1"},
                  ListMeta: {
                      SelfLink: "",
                      ResourceVersion: "",
                      Continue: "",
                      RemainingItemCount: nil,
                  },
                  Status: "Failure",
                  Message: "admission webhook \"default.azuremachinepool.infrastructure.cluster.x-k8s.io\" denied the request: failed to set default managed identity defaults: failed to find parent machine pool: failed to find parent MachinePool: failed to get MachinePool for clusterctl-upgrade-workload-t2kpxs-mp-0",
                  Reason: "Forbidden",
                  Details: nil,
                  Code: 403,
              },
          },
      ]
  occurred
  In [It] at: /home/prow/go/pkg/mod/github.com/nawazkh/cluster-api/test@v1.1.0-beta.2.0.20250115180729-68adca8bf41b/e2e/clusterctl_upgrade.go:454 @ 01/15/25 19:04:42.315

[nawazkh]

/close

[k8s-ci-robot]

@nawazkh: Closed this PR.

In response to this:

/close

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