Update-AzPolicyAssignment has different behavior when run in Powershell vs Windows Powershell

[everest146]

Description

I have a script that uses Update-AzPolicyAssignment to sync policies I have in Azure with my policy jsons I have in AuzreDevOps. But when I run the script in an Azure Powershell job environment I get the following error:
Test-Path : Illegal characters in path.

I also get this error locally if I try to run it in Windows Powershell. However if I use Powershell, Update-AzPolicyAssignment works as expected. All policies assignments that are fed to this function when run on Windows Powershell yield the same result. Some of the output I added below is shortened to remove lots of repeats.

If you need any more information let me know. Thank you in advance.

Issue script & Debug output

DEBUG: [CmdletBeginProcessing]: Starting command
DEBUG: CmdletBeginProcessing:
DEBUG: CmdletProcessRecordStart:
DEBUG: CmdletGetPipeline:
DEBUG: CmdletBeforeAPICall:
DEBUG: URLCreated:
//providers/Microsoft.Management/managementGroups/***/providers/Microsoft.Authorization/policyAssignments/***
-protection?api-version=2023-04-01
DEBUG: RequestCreated:
//providers/Microsoft.Management/managementGroups/***/providers/Microsoft.Authorization/policyAssignments/***
-protection?api-version=2023-04-01
DEBUG: HeaderParametersAdded:
DEBUG: ============================ HTTP REQUEST
============================

HTTP Method:
GET

Absolute Uri:
https://management.azure.com//providers/Microsoft.Management/managementGrou
ps/***/providers/Microsoft.Authorization/p
olicyAssignments/***?api-version=2023-04-01

Headers:
x-ms-unique-id                : 9
x-ms-client-request-id        : e83f3e09-1664-4e44-a4b3-47292ce37e4b
CommandName                   : &
FullCommandName               : Get-AzPolicyAssignment_Get1
ParameterSetName              : __AllParameterSets
User-Agent                    :
AzurePowershell/v0.0.0,PSVersion/v5.1.22621.4391,Az.Policy/7.8.1

Body:


DEBUG: BeforeCall:
DEBUG: ============================ HTTP RESPONSE
============================

Status Code:
OK

Headers:
Pragma                        : no-cache
Strict-Transport-Security     : max-age=31536000; includeSubDomains
x-ms-operation-identifier     :
x-ms-ratelimit-remaining-tenant-reads: 249
x-ms-request-id               : da429540-0285-47c1-b54d-454821bdae50
x-ms-correlation-request-id   : da429540-0285-47c1-b54d-454821bdae50
x-ms-routing-request-id       :
***:***
X-Content-Type-Options        : nosniff
X-Cache                       : CONFIG_NOCACHE
X-MSEdge-Ref                  : Ref A: DD502CD53EA7461EBF9EBC968861A5CB Ref
 B: MNZ221060619039 Ref C: 2025-04-25T21:56:29Z
Cache-Control                 : no-cache

Body:
{
  "identity": {
    "principalId": "***",
    "tenantId": "***",
    "type": "SystemAssigned"
  },
  "properties": {
    "displayName": "",
    "policyDefinitionId":
"/providers/Microsoft.Management/managementGroups/***/providers/Microsoft.Authorization/policySetDefinitions/***",
    "definitionVersion": "1.*.*",
    "scope":
"/providers/Microsoft.Management/managementGroups***",
    "notScopes": [

"/subscriptions/***/resourceGroups/***",

"/subscriptions/***/resourceGroups/***",

"/subscriptions/***/resourceGroups/***",

"/subscriptions/***/resourceGroups/***",

"/subscriptions/***/resourceGroups/***",

"/subscriptions/***/resourceGroups/***",

"/subscriptions/***/resourceGroups/***",

"/subscriptions/***/resourceGroups/***",

"/subscriptions/***/resourceGroups/***",

"/subscriptions/***/resourceGroups/***",

"/subscriptions/***/resourceGroups/***",

"/subscriptions/***/resourceGroups/***",

"/subscriptions/***/resourceGroups/***"
    ],
    "description": "",
    "metadata": {
      "createdOn": "***",
      "updatedOn": "***",
      "createdBy": "***",
      "updatedBy": "***"
    },
    "enforcementMode": "Default"
  },
  "id":
"/providers/Microsoft.Management/managementGroups/***/providers/Microsoft.Authorization/policyAssignments/***
-protection",
  "type": "Microsoft.Authorization/policyAssignments",
  "name": "***",
  "location": "***",
  "systemData": {
    "createdBy": "***",
    "createdByType": "Application",
    "createdAt": "***",
    "lastModifiedBy": "***",
    "lastModifiedByType": "***",
    "lastModifiedAt": "***"
  }
}

DEBUG: ResponseCreated:
DEBUG: BeforeResponseDispatch:
DEBUG: Finally:
DEBUG: CmdletAfterAPICall:
DEBUG: [CmdletProcessRecordAsyncEnd]: Finish HTTP process
DEBUG: CmdletProcessRecordAsyncEnd:
DEBUG: CmdletProcessRecordEnd:
Test-Path : Illegal characters in path.
At C:\***\Documents\WindowsPowerShell\Modul
es\Az.Resources\7.10.0\Policy.Autorest\custom\Helpers.ps1:423 char:9
+     if (Test-Path $parameterValue) {
+         ~~~~~~~~~~~~~~~~~~~~~~~~~
    + CategoryInfo          : InvalidArgument: (C:\***\scripts
   \{
}:String) [Test-Path], ArgumentException
    + FullyQualifiedErrorId : ItemExistsArgumentError,Microsoft.PowerShell
   .Commands.TestPathCommand

Environment data

$PSVersionTable is empty in both local and virtual environments

Module versions

ModuleType Version    Name                                ExportedCommands
---------- -------    ----                                ----------------
Script     4.1.0      Az.Accounts                         {Add-AzEnvironment, Clear-AzConfig, Clear-AzContext, Clear-AzDefault...}
Script     7.10.0     Az.Resources                        {Export-AzResourceGroup, Export-AzTemplateSpec, Get-AzDenyAssignment, Get-AzDeployment...}

Error output

DEBUG: Got version 0 of Az
DEBUG: Got version 0 of Az.Accounts
DEBUG: 6:14:14 PM - [ConfigManager] Got nothing from [DisplaySecretsWarning], Module = [], Cmdlet = []. Returning default value [True].
DEBUG: 6:14:14 PM - ResolveError begin processing with ParameterSet 'AnyErrorParameterSet'.
DEBUG: 6:14:14 PM - [ConfigManager] Got nothing from [DisplayBreakingChangeWarning], Module = [Az.Accounts], Cmdlet = [Resolve-AzError]. Returning default
value [True].
DEBUG: 6:14:14 PM - [ConfigManager] Got nothing from [DisplaySecretsWarning], Module = [], Cmdlet = []. Returning default value [True].


   HistoryId: 12


Message        : Illegal characters in path.
StackTrace     :    at System.IO.Path.CheckInvalidPathChars(String path, Boolean checkAdditional)
                    at System.IO.Path.GetFileName(String path)
                    at System.Management.Automation.Utils.IsReservedDeviceName(String destinationPath)
                    at System.Management.Automation.Utils.NativeItemExists(String path, Boolean& isDirectory, Exception& exception)
                    at Microsoft.PowerShell.Commands.FileSystemProvider.ItemExists(String path, ErrorRecord& error)
Exception      : System.ArgumentException
InvocationInfo : {Test-Path}
Line           :     if (Test-Path $parameterValue) {

Position       : At C:\***\Documents\WindowsPowerShell\Modules\Az.Resources\7.10.0\Policy.Autorest\custom\Helpers.ps1:423
                 char:9
                 +     if (Test-Path $parameterValue) {
                 +         ~~~~~~~~~~~~~~~~~~~~~~~~~

   HistoryId: 7


Message        : The 'Get-AzPolicyAssignment' command was found in the module 'Az.Resources', but the module could not be loaded. For more information,
                 run 'Import-Module Az.Resources'.
StackTrace     :    at System.Management.Automation.ExceptionHandlingOps.CheckActionPreference(FunctionContext funcContext, Exception exception)
                    at System.Management.Automation.Interpreter.ActionCallInstruction`2.Run(InterpretedFrame frame)
                    at System.Management.Automation.Interpreter.EnterTryCatchFinallyInstruction.Run(InterpretedFrame frame)
                    at System.Management.Automation.Interpreter.EnterTryCatchFinallyInstruction.Run(InterpretedFrame frame)
Exception      : System.Management.Automation.CommandNotFoundException
InvocationInfo : {}
Line           :                                $PolicyAssignment = Get-AzPolicyAssignment -Name $AssignmentName -Scope $Assignment.AssignmentScope -ErrorAction Stop

Position       : At C:\***\scripts\New-AzurePolicyInitiativeAssignment.ps1:30 char:25
                 +                 $PolicyAssignment = Get-AzPolicyAssignment -Name $Ass ...
                 +                                     ~~~~~~~~~~~~~~~~~~~~~~
HistoryId      : 7



DEBUG: 6:14:14 PM - [ConfigManager] Got nothing from [DisplayRegionIdentified], Module = [], Cmdlet = []. Returning default value [True].
DEBUG: 6:14:14 PM - [ConfigManager] Got nothing from [CheckForUpgrade], Module = [], Cmdlet = []. Returning default value [True].
DEBUG: AzureQoSEvent:  Module: Az.Accounts:4.1.0; CommandName: Resolve-AzError; PSVersion: 5.1.22621.4391; IsSuccess: True; Duration: 00:00:00.2806546;
SanitizeDuration: 00:00:00.0011187
DEBUG: 6:14:14 PM - [ConfigManager] Got nothing from [EnableDataCollection], Module = [], Cmdlet = []. Returning default value [True].
DEBUG: 6:14:14 PM - ResolveError end processing.