SQL MI Fail over group - statuscode 200 and 404 - azurerm

I’ve been trying to create a primary and secondary managed instance with a fail over group which simply doesnt seem to work. After some research I was able to move forward with the statuscode=200 error by running arm version 3 and higher but not get the below error.

│ Error: issuing create/update request for “Instance Failover Group: (Name “example-fogtest1” / Location Name “eastus” / Resource Group “example1-primary-rg”)”: sql.InstanceFailoverGroupsClient#CreateOrUpdate: Failure sending request: StatusCode=404 – Original Error: Code=“ServerNotInSubscription” Message=“Subscription ‘xxxxxxx’ does not have the server ‘example-primary-sqlmitest1’.”

The primary and secondary instances are created after close to 8 hrs but failover doesnt. Anyone has faced this issue before or any advise is appreciated.

Thank you.