diff --git a/internal/services/containers/kubernetes_cluster_other_resource_test.go b/internal/services/containers/kubernetes_cluster_other_resource_test.go
index 288d656037c1..dd03585d4d36 100644
--- a/internal/services/containers/kubernetes_cluster_other_resource_test.go
+++ b/internal/services/containers/kubernetes_cluster_other_resource_test.go
@@ -804,7 +804,9 @@ func TestAccKubernetesCluster_nodeOsUpgradeChannel(t *testing.T) {
 				check.That(data.ResourceName).Key("node_os_channel_upgrade").HasValue("Unmanaged"),
 			),
 		},
-		data.ImportStep(),
+		// TODO add this back in when upgrading to 2023-06-02-preview
+		// temporarily skip the import check because of the behaviour of this feature
+		// data.ImportStep(),
 		{
 			Config: r.nodeOsUpgradeChannel(data, "SecurityPatch"),
 			Check: acceptance.ComposeTestCheckFunc(
@@ -812,7 +814,7 @@ func TestAccKubernetesCluster_nodeOsUpgradeChannel(t *testing.T) {
 				check.That(data.ResourceName).Key("node_os_channel_upgrade").HasValue("SecurityPatch"),
 			),
 		},
-		data.ImportStep(),
+		// data.ImportStep(),
 		{
 			Config: r.nodeOsUpgradeChannel(data, "NodeImage"),
 			Check: acceptance.ComposeTestCheckFunc(
@@ -820,7 +822,7 @@ func TestAccKubernetesCluster_nodeOsUpgradeChannel(t *testing.T) {
 				check.That(data.ResourceName).Key("node_os_channel_upgrade").HasValue("NodeImage"),
 			),
 		},
-		data.ImportStep(),
+		// data.ImportStep(),
 		{
 			Config: r.nodeOsUpgradeChannel(data, "None"),
 			Check: acceptance.ComposeTestCheckFunc(
@@ -828,7 +830,7 @@ func TestAccKubernetesCluster_nodeOsUpgradeChannel(t *testing.T) {
 				check.That(data.ResourceName).Key("node_os_channel_upgrade").HasValue("None"),
 			),
 		},
-		data.ImportStep(),
+		// data.ImportStep(),
 	})
 }
 
diff --git a/internal/services/containers/kubernetes_cluster_resource.go b/internal/services/containers/kubernetes_cluster_resource.go
index 7d5f3ed9c81a..c85fb975c27d 100644
--- a/internal/services/containers/kubernetes_cluster_resource.go
+++ b/internal/services/containers/kubernetes_cluster_resource.go
@@ -1483,14 +1483,20 @@ func resourceKubernetesClusterCreate(d *pluginsdk.ResourceData, meta interface{}
 	autoUpgradeProfile := &managedclusters.ManagedClusterAutoUpgradeProfile{}
 	autoChannelUpgrade := d.Get("automatic_channel_upgrade").(string)
 	nodeOsChannelUpgrade := d.Get("node_os_channel_upgrade").(string)
-	if autoChannelUpgrade != "" {
+
+	// this check needs to be separate and gated since node_os_channel_upgrade is a preview feature
+	if nodeOsChannelUpgrade != "" && autoChannelUpgrade != "" {
 		if autoChannelUpgrade == string(managedclusters.UpgradeChannelNodeNegativeimage) && nodeOsChannelUpgrade != string(managedclusters.NodeOSUpgradeChannelNodeImage) {
 			return fmt.Errorf("`node_os_channel_upgrade` cannot be set to a value other than `NodeImage` if `automatic_channel_upgrade` is set to `node-image`")
 		}
+	}
+
+	if autoChannelUpgrade != "" {
 		autoUpgradeProfile.UpgradeChannel = pointer.To(managedclusters.UpgradeChannel(autoChannelUpgrade))
 	} else {
 		autoUpgradeProfile.UpgradeChannel = pointer.To(managedclusters.UpgradeChannelNone)
 	}
+
 	if nodeOsChannelUpgrade != "" {
 		autoUpgradeProfile.NodeOSUpgradeChannel = pointer.To(managedclusters.NodeOSUpgradeChannel(nodeOsChannelUpgrade))
 	}
@@ -1953,16 +1959,17 @@ func resourceKubernetesClusterUpdate(d *pluginsdk.ResourceData, meta interface{}
 			existing.Model.Properties.AutoUpgradeProfile = &managedclusters.ManagedClusterAutoUpgradeProfile{}
 		}
 		channel := d.Get("automatic_channel_upgrade").(string)
-		if channel == string(managedclusters.UpgradeChannelNodeNegativeimage) && d.Get("node_os_channel_upgrade").(string) != string(managedclusters.NodeOSUpgradeChannelNodeImage) {
-			return fmt.Errorf("`node_os_channel_upgrade` must be set to `NodeImage` if `automatic_channel_upgrade` is set to `node-image`")
-		}
 		if channel == "" {
 			channel = string(managedclusters.UpgradeChannelNone)
 		}
 		existing.Model.Properties.AutoUpgradeProfile.UpgradeChannel = pointer.To(managedclusters.UpgradeChannel(channel))
 	}
+
 	if d.HasChange("node_os_channel_upgrade") {
 		updateCluster = true
+		if d.Get("automatic_channel_upgrade").(string) == string(managedclusters.UpgradeChannelNodeNegativeimage) && d.Get("node_os_channel_upgrade").(string) != string(managedclusters.NodeOSUpgradeChannelNodeImage) {
+			return fmt.Errorf("`node_os_channel_upgrade` must be set to `NodeImage` if `automatic_channel_upgrade` is set to `node-image`")
+		}
 		if existing.Model.Properties.AutoUpgradeProfile == nil {
 			existing.Model.Properties.AutoUpgradeProfile = &managedclusters.ManagedClusterAutoUpgradeProfile{}
 		}
@@ -2313,7 +2320,12 @@ func resourceKubernetesClusterRead(d *pluginsdk.ResourceData, meta interface{})
 				}
 			}
 			d.Set("automatic_channel_upgrade", upgradeChannel)
-			d.Set("node_os_channel_upgrade", nodeOSUpgradeChannel)
+
+			// the API returns `node_os_channel_upgrade` when `automatic_channel_upgrade` is set to `node-image`
+			// since it's a preview feature we will only set this if it's explicitly been set in the config for the time being
+			if v, ok := d.GetOk("node_os_channel_upgrade"); ok && v.(string) != "" {
+				d.Set("node_os_channel_upgrade", nodeOSUpgradeChannel)
+			}
 
 			customCaTrustCertList := flattenCustomCaTrustCerts(props.SecurityProfile.CustomCATrustCertificates)
 			d.Set("custom_ca_trust_certificates_base64", customCaTrustCertList)