Although the problem doesn't have a serious influence, it is there. Set QA_ACK+.

I added some test codes to /usr/lib/python3.9/site-packages/cloudinit/distros/__init__.py

        if sys_hostname and prev_hostname and sys_hostname != prev_hostname:
            LOG.info(sys_hostname)   #test code
            LOG.info(prev_hostname)  #test code
            LOG.info(
                "%s differs from %s, assuming user maintained hostname.",
                prev_hostname_fn,
                sys_fn,
            )
            return

and then reboot the instance, we can see that LOG.info(sys_hostname) output with newline, but LOG.info(prev_hostname) does not contain newline.

2023-03-30 08:55:29,843 - subp.py[DEBUG]: Running command ['hostname'] with allowed return codes [0] (shell=False, capture=True)
2023-03-30 08:55:29,845 - __init__.py[INFO]: xiachen-test-vm

2023-03-30 08:55:29,845 - __init__.py[INFO]: xiachen-test-vm
2023-03-30 08:55:29,845 - __init__.py[INFO]: /var/lib/cloud/data/previous-hostname differs from /etc/hostname, assuming user maintained hostname.
------------------------------------------------------

And I tested ubuntu, it doesn't have this problem. 
-------------
ubuntu@xiachen-test-ubuntu:~$ cat /etc/hostname
xiachen-test-ubuntu
ubuntu@xiachen-test-ubuntu:~$ cat /var/lib/cloud/data/previous-hostname
xiachen-test-ubuntu
ubuntu@xiachen-test-ubuntu:~$ 
-------------
Comparing to other distros, like ubuntu or debian, the differences are functions of read/write_hostname in /usr/lib/python3.9/site-packages/cloudinit/distros/rhel.py,
when read_hostname using command 'hostname' which contains newline, but it doesn't write newline to /var/lib/cloud/data/previous-hostname.

There is a Parser 'cloudinit.distros.parsers.hostname' that deals with how to work with /etc/hostname format, maybe we could also import and use it.

Upstream ticket: https://bugs.launchpad.net/cloud-init/+bug/2015043

reply to Ani Sinha from comment #5)
> (In reply to Marian Jankular from comment #4)
> > Created attachment 1955398 [details]
> > cloud-init log
> > 
> > not sure if the patch fixes the issue as i have installed new rpm on my
> > reproducer (rhel8.7)
> > 
> > 1, initial hostname - mj-rhel87
> > 2, reboot
> > 3, cloud init reported that hostname and previous hostname differs
> > ~~~
> > [root@mj-rhel87 ~]# cat /var/lib/cloud/data/previous-hostname 
> > mj-rhel87[root@mj-rhel87 ~]# hostnamectl set-hostname mj-rhel87-new
> > ~~~
> > 
> > 4, changed hostname to mj-rhel87-new
> > 5, reboot
> > 6, cloud-init reported that hostname and previous hostname differs
> > ~~~
> > [root@mj-rhel87-new ~]# cat /var/lib/cloud/data/previous-hostname 
> > mj-rhel87[root@mj-rhel87hostnamectl set-hostname mj-rhel87-new-new
> > ~~~
> > 
> > 7, reboot
> > 8, cloud-init reported that hostname and previous hostname differs
> > ~~~
> > [root@mj-rhel87-new-new ~]# cat /var/lib/cloud/data/previous-hostname 
> > mj-rhel87[root@mj-rhel87-new-new ~]# rpm -qa | grep cloud-init
> > cloud-init-22.1-6.el8.2.anisinha202303311339.noarch
> > ~~~
> > 
> > i would say the /var/lib/cloud/data/previous-hostname should change in my
> > case right?
> 
> I had to delete previous-hostname for it to get regenerated. In your case,
> it seems cloud-init is not updating the file at all, so you don't know if it
> works or not. Delete "previous-hostname" and then install the updated rpm
> and check.

I see this code in update_hostname() and this explains it:

       # If something else has changed the hostname after we set it                                                                                                             
        # initially, we should not overwrite those changes (we should                                                                                                            
        # only be setting the hostname once per instance)                                                                                                                        
        if sys_hostname and prev_hostname and sys_hostname != prev_hostname:                                                                                                     
            LOG.info(                                                                                                                                                            
                "%s differs from %s, assuming user maintained hostname.",                                                                                                        
                prev_hostname_fn,                                                                                                                                                
                sys_fn,                                                                                                                                                          
            )                                                                                                                                                                    
            return  

This means subsequent changes to hostname would not update previous-hostname :(  However, if you use cloud-init config to change the hostname, I think the file will be updated:

https://cloudinit.readthedocs.io/en/latest/reference/modules.html#set-hostname

MR: https://gitlab.com/redhat/rhel/src/cloud-init/-/merge_requests/97

Since the problem described in this bug report should be
resolved in a recent advisory, it has been closed with a
resolution of ERRATA.

For information on the advisory (Moderate: cloud-init security, bug fix, and enhancement update), and where to find the updated
files, follow the link below.

If the solution does not work for you, open a new bug report.

https://access.redhat.com/errata/RHSA-2023:6943