diff --git a/azure/services/aso/aso.go b/azure/services/aso/aso.go
index 1089f7a56f3..e8f14ee8912 100644
--- a/azure/services/aso/aso.go
+++ b/azure/services/aso/aso.go
@@ -122,15 +122,11 @@ func (r *reconciler[T]) CreateOrUpdateResource(ctx context.Context, spec azure.A
 				// update instead of returning early.
 				adopt = true
 			case cond.Reason == conditions.ReasonReconciling.Name:
-				// Updating the spec of an ASO resource that is already being updated will swallow this update
-				// and ignore it until the next periodic ASO resync.
-				// ref: https://github.com/Azure/azure-service-operator/issues/3451
-				err := azure.NewOperationNotDoneError(&infrav1.Future{
+				readyErr = azure.NewOperationNotDoneError(&infrav1.Future{
 					Type:          createOrUpdateFutureType,
 					ResourceGroup: existing.GetNamespace(),
 					Name:          existing.GetName(),
 				})
-				return zero, azure.WithTransientError(err, requeueInterval)
 			default:
 				readyErr = fmt.Errorf("resource is not Ready: %s", conds[i].Message)
 			}
diff --git a/azure/services/aso/aso_test.go b/azure/services/aso/aso_test.go
index 5f06161699d..9481038f6ed 100644
--- a/azure/services/aso/aso_test.go
+++ b/azure/services/aso/aso_test.go
@@ -230,6 +230,10 @@ func TestCreateOrUpdateResource(t *testing.T) {
 				Namespace: "namespace",
 			},
 		})
+		specMock.EXPECT().Parameters(gomockinternal.AContext(), gomock.Not(gomock.Nil())).DoAndReturn(func(_ context.Context, group *asoresourcesv1.ResourceGroup) (*asoresourcesv1.ResourceGroup, error) {
+			return group, nil
+		})
+		specMock.EXPECT().WasManaged(gomock.Any()).Return(false)
 
 		ctx := context.Background()
 		g.Expect(c.Create(ctx, &asoresourcesv1.ResourceGroup{