[Bug]: The update of existing Azure AD app doesn't work

[eriksML]

Is there an existing issue for this?

• I have searched the existing issues

Affected Resource(s)

applications.azuread.upbound.io/v1beta1 - Application

Resource MRs required to reproduce the bug

apiVersion: applications.azuread.upbound.io/v1beta1
kind: Application
metadata:
  name: my-app-test
  annotations:
    crossplane.io/external-name: "/applications/00000000-0000-0000-0000-000000000000"
spec:
  managementPolicies: ["Observe"]
  forProvider:
    displayName: my-app-test
    identifierUris:
    - "dummyurl.com"
  providerConfigRef:
    name: azuread-provider-config

Steps to Reproduce

• updating the existing Azure AD application

What happened?

Hi crossplane team,

we need to update the existing azure AD application by adding redirect uris for SSO configuration.
However looks it's not working with the azuread provider the version 1.6.0.

Relevant Error Output Snippet

Warning CannotObserveExternalResource 33s managed/applications.azuread.upbound.io/v1beta1, kind=application external resource does not exist

Crossplane Version

1.18.0

Provider Version

1.6.0

Kubernetes Version

v1.31.0

Kubernetes Distribution

minikube

Additional Info

I've tried to use identifierUris as an additional field but still not working. Changing the management policy and using "*" creates a new app instead of updating the existing one. My provider config has ReadWrite permissions for all apps.