What action is performed in Azure when an instance is reported as being in a...

Instance Termination Detection:When an instance in Azure is reported as being in a terminated state but NC2 expects it to be running, the system will automatically take corrective actions.

Host Condemnation and Replacement:NC2 will condemn the host, marking it as unusable, and will then trigger the replacement process to ensure that the cluster maintains its required capacity and performance levels. This automatic handling ensures minimal disruption to the workloads running on the cluster.

References:

Nutanix NC2 Automated Management Features

Azure Instance State Documentation