/nix/store/6xysgagcyklifd0mlayli4jmx22173h5-source/nixos/modules/virtualisation/azure-image.nix

system.build.azureImage = import ../../lib/make-disk-image.nix {

  name = "azure-image";
  postVM = ''
    ${pkgs.vmTools.qemu}/bin/qemu-img convert -f raw -o subformat=fixed,force_size -O vpc $diskImage $out/disk.vhd
    rm $diskImage
  '';
  configFile = ./azure-config-user.nix;
  format = "raw";
  inherit (cfg) diskSize;
  inherit config lib pkgs;
};

When a VM is first provisioned on Azure, the Azure host presents a 'provisioning cdrom iso disk' to the VM. This provisioning disk is usually presented to the VM through /dev/sr0.

Maybe the image stuff (the other parts in the file as well, e.g. the collection of the ssh keys) is only for the very first boot of a newly provisioned vm? (And thus later configuration for the machine should only use azure-common).