stateValueMap, err = n.config.ApplyTFConversions(stateValueMap, config.FromTerraform)
if err != nil {
return managed.ExternalUpdate{}, errors.Wrap(err, "cannot convert the singleton lists for the updated resource state value map into embedded objects")
}
Not applying the tf conversion after mashalling state map causes error when setting observation.
https://github.com/crossplane/upjet/blob/3afbb7796d468b52e48ba0d59026babbd11d283a/pkg/controller/external_tfpluginsdk.go#L699
Possible solution: