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Does this show up as a failed diagnostic? It looks like it should have passed

No, it's just a confusing message.

expect

implies that what it got isn't what it

expected

Ok, I have those too. I agree that it is confusing; however, it doesn't say that this is a failure

Right, not saying it's a big deal, but, ideally it should be improved. I'm not currently fighting Rancher, otherwise I'd consider filing bugs... mostly fighting GKE/Autopilot