This looks like a duplicate of bug 1702866.
Thank you Benjamin,
It does look very similar.
PTAL at the possible duplicate and let me know your thoughts.
> Due to infra? ... or do you believe that Ignition is acting differently on OpenStack?
I think it is acting differently, does someone tested out this kind of setup on the OpenStack infra side?
I don't have now openstack setup so not able to test with latest version of RHCOS.