Since these images can be used to create multiple machines, they should not have a unique machine-id attached to them. Replace /etc/machine-id with an empty file so that it will be regenerated at boot time.
also remote the auth line so that it uses the defaults. Related: rhbz#1628645 Related: rhbz#1628646 Related: rhbz#1628647 Related: rhbz#1628648
This does pretty much the same things as the AMI compose type, but also replaces NetworkManager with the Azure linux agent.