Rancher (2.7.3) and Harvester (1.1.1) IP issue

Rancher-manager 2.7.3 and Harvester 1.1.1 won’t create rke2 cluster from rancher templates (which works on same setup with rancher-manager 2.7.0). The ‘error’ is:

Creating server [fleet-default/orange-orange-controlplane-d37b660f-t4xkp] of kind (HarvesterMachine) for machine orange-orange-controlplane-5b577d874f-dqvp4 in infrastructure provider

IP is available from my dhcp-server and telnet on port 22 works as expected

telnet 22
Connected to
Escape character is '^]'.
SSH-2.0-OpenSSH_8.9p1 Ubuntu-3
Connection closed by foreign host.

Harvester isn’t registering any IP on it’s vm if initiated from rancher-rke2 request. Creating a vm manually works in harvester without any issue.

Anybody has rancher-manager 2.7.3 working for rke2 templates using harvester 1.1.1 ? I can make a support bundle if needed.