Managed identity auto-login periodically fails from Azure Function App

[Xoph]

I have an Azure Function App setup with a system-assigned managed identity. I see that every night all my requests to get the managed identity authentication are failing for ~5 to 10 minutes, at 11 pm. The requests are coming from an AzCopy command. At all other times, the managed identity authentication is working fine.

It's a v4 runtime, on a S1 app service plan.

The error is:

Failed to perform Auto-login: ManagedIdentityCredential: Get "http://127.0.0.1:41044/msi/token/?api-version=2019-08-01&resource=https%3A%2F%2Fstorage.azure.com": dial tcp 127.0.0.1:41044: connectex: No connection could be made because the target machine actively refused it..

My C# code that calls it is:

string arguments = "copy https://source.blob.core.windows.net/ab12345/ABCLog/DEF/ https://destination.blob.core.windows.net/container/AB12345 --recursive=true --include-before 2024-11-25T09:30:42.7597254-05:00 --include-after 2024-11-25T10:30:42.7597254-05:00
ProcessStartInfo startInfo = new ProcessStartInfo()
{
    FileName = "azcopy.exe",
    Arguments = arguments,
    RedirectStandardOutput = true,
    UseShellExecute = false,
};
startInfo.EnvironmentVariables.Add("AZCOPY_AUTO_LOGIN_TYPE", "MSI");
startInfo.EnvironmentVariables.Add("AZCOPY_LOG_LOCATION", Environment.GetEnvironmentVariable("TEMP"));
startInfo.EnvironmentVariables.Add("AZCOPY_JOB_PLAN_LOCATION", Environment.GetEnvironmentVariable("TEMP"));
Process process = new Process()
{
    StartInfo = startInfo
};
process.Start();
process.WaitForExit();

Which is basically equivalent to running:

$env:AZCOPY_AUTO_LOGIN_TYPE=MSI
azcopy.exe copy https://source.blob.core.windows.net/ab12345/ABCLog/DEF/ https://destination.blob.core.windows.net/container/AB12345 --recursive=true --include-before 2024-11-25T09:30:42.7597254-05:00 --include-after 2024-11-25T10:30:42.7597254-05:00

I also created an AzCopy repo issue, but I believe this is related to the function app.