avd up errors with template validation failure

[Kraftwerx]

Describe the bug
During avd up, at the point when the sql server template is getting deployed, this error stops the process:
(✓) Done: Resource group: basfrwatest (1.395s)
(✓) Done: Log Analytics workspace: log-iuafamgrkroji (17.383s)
(✓) Done: Application Insights: appi-iuafamgrkroji (2.502s)
(✓) Done: Azure Front Door / CDN profile: afd-iuafamgrkroji (44.798s)
| ======| Creating/Updating resources
ERROR: error executing step command 'provision': deployment failed: error deploying infrastructure: deploying to subscription:

Deployment Error Details:
InvalidTemplate: Deployment template validation failed: 'The template output reference to 'Microsoft.Resources/deployments/application-sql-server-iuafamgrkroji' requires an API version. Please see https://aka.ms/arm-syntax for usage details.'.

TraceID: 6674bb737144d807050b359913b60f75

To Reproduce
Steps to reproduce the behavior:

1. Go to solution
2. run avd up
3. 3. Scroll down to '....'
4. See error

Expected behavior
deployment should succeed

Screenshots
If applicable, add screenshots to help explain your problem.

Desktop (please complete the following information):

• OS: Windows 10
• Shell PowerShell Core
• Shell Version
• Name Value

---

PSVersion 7.4.5
PSEdition Core
GitCommitId 7.4.5
OS Microsoft Windows 10.0.26100
Platform Win32NT
PSCompatibleVersions {1.0, 2.0, 3.0, 4.0…}
PSRemotingProtocolVersion 2.3
SerializationVersion 1.1.0.1
WSManStackVersion 3.0

• az version [e.g.]
  {
  "azure-cli": "2.61.0",
  "azure-cli-core": "2.61.0",
  "azure-cli-telemetry": "1.1.0",
  "extensions": {
  "aks-preview": "0.5.151"
  }
  }
• az bicep version Bicep CLI version 0.30.23 (ec3612efc7)
• azd version azd version 1.10.1 (commit 31409a33266fb4a5fdbb644bc83988e725d6c7c9)
• dotnet --version 8.0.403

Additional context
Add any other context about the problem here.

[coderandhiker]

Please re-test using the devcontainer. It looks like the versions of az tools listed are not the same as those we've included and tested there.

[rakeshhotker]

Hey I tried with the following versions, it still doesn't work, i get the same issues:
{
"azure-cli": "2.75.0",
"azure-cli-core": "2.75.0",
"azure-cli-telemetry": "1.1.0",
"extensions": {}
}