ManagedIdentityCredential throws CUE when endpoint unavailable

sdk/identity/Azure.Identity/CHANGELOG.md

@@ -8,6 +8,8 @@
 
 ### Bugs Fixed
 
+- `ManagedIdentityCredential` throws `CredentialUnavilableException` when the IMDS endpoint is unavailable. This addresses a regression in how it behaves in the `ChainedTokenCredential` ([47057](https://github.com/Azure/azure-sdk-for-net/issues/47057)).
+
 ### Other Changes
 
 ## 1.14.0 (2025-05-13)

sdk/identity/Azure.Identity/src/ManagedIdentityClient.cs

@@ -87,10 +87,19 @@ public async ValueTask<AccessToken> AuthenticateAsync(bool async, TokenRequestCo
                 return await tokenExchangeManagedIdentitySource.AuthenticateAsync(async, context, cancellationToken).ConfigureAwait(false);
             }
 
-            // The default case is to use the MSAL implementation, which does no probing of the IMDS endpoint.
-            result = async ?
-                await _msalManagedIdentityClient.AcquireTokenForManagedIdentityAsync(context, cancellationToken).ConfigureAwait(false) :
-                _msalManagedIdentityClient.AcquireTokenForManagedIdentity(context, cancellationToken);
+            try
+            {
+                // The default case is to use the MSAL implementation, which does no probing of the IMDS endpoint.
+                result = async ?
+                    await _msalManagedIdentityClient.AcquireTokenForManagedIdentityAsync(context, cancellationToken).ConfigureAwait(false) :
+                    _msalManagedIdentityClient.AcquireTokenForManagedIdentity(context, cancellationToken);
+            }
+            // If the IMDS endpoint is not available, we will throw a CredentialUnavailableException.
+            catch (MsalServiceException ex) when (HasInnerExceptionMatching(ex, e => e is RequestFailedException && e.Message.Contains("timed out")))
+            {
+                // If the managed identity is not found, throw a more specific exception.
+                throw new CredentialUnavailableException(MsiUnavailableError, ex);
+            }
 
             return result.ToAccessToken();
         }
@@ -127,5 +136,19 @@ private static ManagedIdentitySource SelectManagedIdentitySource(ManagedIdentity
             return TokenExchangeManagedIdentitySource.TryCreate(options) ??
             new ImdsManagedIdentityProbeSource(options, client);
         }
+
+        private static bool HasInnerExceptionMatching(Exception exception, Func<Exception, bool> condition)
+        {
+            var current = exception;
+            while (current != null)
+            {
+                if (condition(current))
+                {
+                    return true;
+                }
+                current = current.InnerException;
+            }
+            return false;
+        }
     }
 }

sdk/identity/Azure.Identity/tests/ManagedIdentityCredentialTests.cs

@@ -18,6 +18,7 @@
 using Azure.Core.TestFramework;
 using Azure.Identity.Tests.Mock;
 using Microsoft.AspNetCore.Http;
+using Microsoft.Identity.Client;
 using NUnit.Framework;
 using NUnit.Framework.Internal;
 
@@ -841,6 +842,30 @@ public async Task VerifyMsiUnavailableOnIMDSRequestFailedExcpetion()
             await Task.CompletedTask;
         }
 
+        [NonParallelizable]
+        [Test]
+        public async Task ThrowsCredentialUnavailableWhenIMDSTimesOut()
+        {
+            using var environment = new TestEnvVar(new() { { "MSI_ENDPOINT", null }, { "MSI_SECRET", null }, { "IDENTITY_ENDPOINT", null }, { "IDENTITY_HEADER", null }, { "AZURE_POD_IDENTITY_AUTHORITY_HOST", null } });
+
+            var mockTransport = new MockTransport(req =>
+            {
+                throw new MsalServiceException(MsalError.ManagedIdentityRequestFailed, "Retry failed", new RequestFailedException("Operation timed out (169.254.169.254:80"));
+            });
+            var options = new TokenCredentialOptions() { IsChainedCredential = false, Transport = mockTransport };
+
+            ManagedIdentityCredential credential = InstrumentClient(new ManagedIdentityCredential(
+                new ManagedIdentityClient(
+                    new ManagedIdentityClientOptions() { IsForceRefreshEnabled = true, Options = options, Pipeline = CredentialPipeline.GetInstance(options, IsManagedIdentityCredential: true) })
+            ));
+
+            var ex = Assert.ThrowsAsync<CredentialUnavailableException>(async () => await credential.GetTokenAsync(new TokenRequestContext(MockScopes.Default)));
+
+            Assert.That(ex.Message, Does.Contain(ManagedIdentityClient.MsiUnavailableError));
+
+            await Task.CompletedTask;
+        }
+
         [NonParallelizable]
         [Test]
         public async Task VerifyMsiUnavailableOnIMDSGatewayErrorResponse([Values(502, 504)] int statusCode)