Timeouts setting is not respected when InsufficientInstanceCapacity occur

[jakubkrzykowski]

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Terraform CLI and Terraform AWS Provider Version

terraform version - 0.12.24
terraform aws provider version - 2.70.0

Affected Resource(s)

• aws_instance

Terraform Configuration Files

resource "aws_instance" "x" {
  ami              = "ami-xxx"
  instance_type    = "c4.2xlarge"

  iam_instance_profile   = data.aws_iam_instance_profile.x.name
  placement_group        = data.aws_instance.x.placement_group

  vpc_security_group_ids = "sg-xxx"
  subnet_id              = "subnet-xxx"

  root_block_device {
    volume_type = "gp2"
    volume_size = 16
  }
  timeouts {
    create = "20m"
    update = "20m"
    delete = "20m"
  }
}

Expected Behavior

Terraform should fail after 20m if instance is not in running state.

Actual Behavior

Terraform failed after 50m of not being able to create instance with following error:

aws_instance.x: Still creating... [50m0s elapsed]
aws_instance.x: Still creating... [50m10s elapsed]
aws_instance.x: Still creating... [50m20s elapsed]
aws_instance.x: Still creating... [50m30s elapsed]
aws_instance.x: Still creating... [50m40s elapsed]
aws_instance.x: Still creating... [50m50s elapsed]
Error: Error launching source instance: InsufficientInstanceCapacity: We currently do not have sufficient c4.2xlarge capacity in the Availability Zone you requested (us-east-2a). Our system will be working on provisioning additional capacity. You can currently get c4.2xlarge capacity by not specifying an Availability Zone in your request or choosing us-east-2b, us-east-2c.
status code: 500, request id: c828e7ec-3b08-49d6-b510-374d75f7b2cb

on notebook.tf line 19, in resource "aws_instance" "x":
19: resource "aws_instance" "x" {

Steps to Reproduce

1. terraform apply

[sidewinder12s]

related: #15183

[github-actions]

This functionality has been released in v4.57.0 of the Terraform AWS Provider. Please see the Terraform documentation on provider versioning or reach out if you need any assistance upgrading.

For further feature requests or bug reports with this functionality, please create a new GitHub issue following the template. Thank you!

[github-actions]

I'm going to lock this issue because it has been closed for 30 days ⏳. This helps our maintainers find and focus on the active issues.
If you have found a problem that seems similar to this, please open a new issue and complete the issue template so we can capture all the details necessary to investigate further.