Customer was trying to upgrade the guest cluster to v1.32.7, but Kubernetes Release was not present for that version.
vCenter 8.0 U3 and VKS Supervisor
Possible corruption of the content library record or template means that the image is not security compliant and the Kubernetes Release is not correctly synchronized in VKS.
If the Kubernetes Release is not showing using the command. In this case the version is "1.32.7"
kubectl get kr -A | grep -E "NAME|1.32.7"
In the vSphere Client, check the entry in the Content Library for that version to see if it is not "Security Compliant".
Please contact VMware Support as the resolution requires ssh access to vCenter and possibly the Supervisor Control Planes.
The steps to clean up and sync the kubernetes release are based on KB 307167 : Failed to delete the content library item via vSphere web client