fix(health): update crossplane healthchecks (#25386)

Signed-off-by: Jonasz Lasut-Balcerzak <jonasz.lasut@gmail.com>
Signed-off-by: Jonasz Łasut-Balcerzak <jonasz.lasut@gmail.com>

resource_customizations/_.crossplane.io/_/health.lua

@@ -1,4 +1,4 @@
--- Health check copied from here: https://github.com/crossplane/docs/blob/709889c5dbe6e5a2ea3dffd66fe276cf465b47b5/content/master/guides/crossplane-with-argo-cd.md
+-- Health check copied from here: https://github.com/crossplane/docs/blob/9fe744889fc150ca71e5298d90b4133f79ea20f2/content/master/guides/crossplane-with-argo-cd.md
 
 health_status = {
   status = "Progressing",
@@ -59,7 +59,6 @@ for i, condition in ipairs(obj.status.conditions) do
     if condition.status == "True" then
       health_status.status = "Healthy"
       health_status.message = "Resource is up-to-date."
-      return health_status
     end
   end
 end

resource_customizations/_.crossplane.io/_/health_test.yaml

@@ -6,4 +6,8 @@ tests:
   - healthStatus:
       status: Healthy
       message: "Resource is up-to-date."
-    inputPath: testdata/configurationrevision_healthy.yaml
+    inputPath: testdata/configurationrevision_healthy.yaml
+  - healthStatus:
+      status: Degraded
+      message: "ActivePackageRevision UnhealthyPackageRevision"
+    inputPath: testdata/provider_degraded.yaml

resource_customizations/_.crossplane.io/_/testdata/provider_degraded.yaml

@@ -0,0 +1,33 @@
+apiVersion: pkg.crossplane.io/v1
+kind: Provider
+metadata:
+  name: upbound-provider-family-azure
+spec:
+  ignoreCrossplaneConstraints: false
+  package: xpkg.upbound.io/upbound/provider-family-azure:v2.2.0
+  packagePullPolicy: IfNotPresent
+  revisionActivationPolicy: Automatic
+  revisionHistoryLimit: 1
+  runtimeConfigRef:
+    apiVersion: pkg.crossplane.io/v1beta1
+    kind: DeploymentRuntimeConfig
+    name: default
+  skipDependencyResolution: false
+status:
+  conditions:
+  - lastTransitionTime: "2025-11-22T08:47:52Z"
+    message: 'Package runtime health is "False" with message: post establish xppkgruntime
+      hook failed for package: provider package deployment is unavailable with message:
+      Deployment does not have minimum availability.'
+    observedGeneration: 3
+    reason: UnhealthyPackageRevision
+    status: "False"
+    type: Healthy
+  - lastTransitionTime: "2025-11-22T08:45:44Z"
+    observedGeneration: 3
+    reason: ActivePackageRevision
+    status: "True"
+    type: Installed
+  currentIdentifier: xpkg.upbound.io/upbound/provider-family-azure:v2.2.0
+  currentRevision: upbound-provider-family-azure-04ba5ac3fc37
+  resolvedPackage: xpkg.upbound.io/upbound/provider-family-azure:v2.2.0

resource_customizations/_.upbound.io/_/health.lua

@@ -1,4 +1,4 @@
--- Health check copied from here: https://github.com/crossplane/docs/blob/709889c5dbe6e5a2ea3dffd66fe276cf465b47b5/content/master/guides/crossplane-with-argo-cd.md
+-- Health check copied from here: https://github.com/crossplane/docs/blob/9fe744889fc150ca71e5298d90b4133f79ea20f2/content/master/guides/crossplane-with-argo-cd.md
 
 health_status = {
   status = "Progressing",
@@ -56,7 +56,6 @@ for i, condition in ipairs(obj.status.conditions) do
     if condition.status == "True" then
       health_status.status = "Healthy"
       health_status.message = "Resource is up-to-date."
-      return health_status
     end
   end
 end

resource_customizations/_.upbound.io/_/health_test.yaml

@@ -3,3 +3,7 @@ tests:
       status: Healthy
       message: "Resource is up-to-date."
     inputPath: testdata/providerconfig_healthy.yaml
+  - healthStatus:
+      status: Degraded
+      message: "update failed: async update failed: refuse to update the external resource because the following update requires replacing it: cannot change the value of the argument \"location\" from \"westeurope\" to \"switzerlandnorth\""
+    inputPath: testdata/managedresource_failedupdate_degraded.yaml

resource_customizations/_.upbound.io/_/testdata/managedresource_failedupdate_degraded.yaml

@@ -0,0 +1,46 @@
+apiVersion: azure.m.upbound.io/v1beta1
+kind: ResourceGroup
+metadata:
+  annotations:
+    crossplane.io/external-create-pending: '2025-11-22T08:33:27Z'
+    crossplane.io/external-create-succeeded: '2025-11-22T08:33:27Z'
+    crossplane.io/external-name: example-resources
+  name: example-resources
+spec:
+  forProvider:
+    location: Switzerland North
+  initProvider: {}
+  managementPolicies:
+    - '*'
+  providerConfigRef:
+    kind: ClusterProviderConfig
+    name: default
+status:
+  atProvider:
+    id: >-
+      /subscriptions/uuid/resourceGroups/example-resources
+    location: westeurope
+    managedBy: ''
+  conditions:
+    - lastTransitionTime: '2025-11-22T08:33:40Z'
+      reason: Available
+      status: 'True'
+      type: Ready
+    - lastTransitionTime: '2025-11-22T08:36:12Z'
+      message: >-
+        update failed: async update failed: refuse to update the external
+        resource because the following update requires replacing it: cannot
+        change the value of the argument "location" from "westeurope" to
+        "switzerlandnorth"
+      observedGeneration: 3
+      reason: ReconcileError
+      status: 'False'
+      type: Synced
+    - lastTransitionTime: '2025-11-22T08:36:11Z'
+      message: >-
+        async update failed: refuse to update the external resource because the
+        following update requires replacing it: cannot change the value of the
+        argument "location" from "westeurope" to "switzerlandnorth"
+      reason: AsyncUpdateFailure
+      status: 'False'
+      type: LastAsyncOperation