Hi Basam Ahmad
Thanks for using the Q&A platform.
You're encountering a known limitation during migration; if even one VM in an Availability Set isn’t part of the Basic Load Balancer's backend pool, the in-place upgrade will fail. The Azure upgrade guidance explicitly lists this as an unsupported scenario.
Recommendation would be to temporarily add all VMs in the Availability Set into a backend pool, even if some aren't serving traffic through that LB. Kindly check our previous feedback on the same issue and provided suggestions: https://learn.microsoft.com/en-us/answers/questions/4375236/upgrading-load-balancer-from-basic-to-standard-sku?
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Regards,
Obinna.