Can't deploy a privatelink service with Terraform

Working on a Terraform script to deploy a Private Link Service. This a part of my script:

resource "azurerm_resource_group" "example" {
  name     = "RG6"
  location = "West Europe"
}

resource "azurerm_virtual_network" "example" {
  name                = "example-vnet"
  address_space       = ["10.5.0.0/16"]
  location            = azurerm_resource_group.example.location
  resource_group_name = azurerm_resource_group.example.name
}

resource "azurerm_subnet" "example" {
  name                                      = "example-subnet"
  resource_group_name                       = azurerm_resource_group.example.name
  virtual_network_name                      = azurerm_virtual_network.example.name
  address_prefixes                          = ["10.5.1.0/24"]
  private_endpoint_network_policies_enabled = false
}

resource "azurerm_public_ip" "example" {
  name                = "example-api"
  sku                 = "Standard"
  location            = azurerm_resource_group.example.location
  resource_group_name = azurerm_resource_group.example.name
  allocation_method   = "Static"
}

resource "azurerm_lb" "example" {
  name                = "example-lb"
  sku                 = "Standard"
  location            = azurerm_resource_group.example.location
  resource_group_name = azurerm_resource_group.example.name

  frontend_ip_configuration {
    name                 = azurerm_public_ip.example.name
    public_ip_address_id = azurerm_public_ip.example.id
  }
}

resource "azurerm_private_link_service" "example" {
  name                                        = "example-privatelink"
  location                                    = azurerm_resource_group.example.location
  resource_group_name                         = azurerm_resource_group.example.name
  load_balancer_frontend_ip_configuration_ids = [azurerm_lb.example.frontend_ip_configuration[0].id]
  auto_approval_subscription_ids              = [local.subscription_id]
  visibility_subscription_ids                 = [local.subscription_id]

  nat_ip_configuration {
    name               = "primary"
    subnet_id          = azurerm_subnet.example.id
    primary            = true
    private_ip_address = "10.5.1.17"
  }

  nat_ip_configuration {
    name                       = "secondary"
    private_ip_address         = "10.5.1.18"
    private_ip_address_version = "IPv4"
    subnet_id                  = azurerm_subnet.example.id
    primary                    = false
  }
}

At run I get this error message:

│ Error: creating Private Link Service: (Name "example-privatelink" / Resource Group "RG6"): network.PrivateLinkServicesClient#CreateOrUpdate: Failure sending request: StatusCode=400 -- Original Error: Code="PrivateLinkServiceCannotBeCreatedInSubnetThatHasNetworkPoliciesEnabled" Message="Private link service /subscriptions/XXXXXXX/resourceGroups/RG6/providers/Microsoft.Network/privateLinkServices/example-privatelink cannot be created in a subnet /subscriptions/XXXXXXX/resourceGroups/RG6/providers/Microsoft.Network/virtualNetworks/example-vnet/subnets/example-subnet since it has private link service network policies enabled." Details=[] │ │ with azurerm_private_link_service.example, │ on config.tf line 83, in resource "azurerm_private_link_service" "example": │ 83: resource "azurerm_private_link_service" "example" {

My question

Why I get this message. I set this parameter false :

private_endpoint_network_policies_enabled = false

This is asked from doc: https://learn.microsoft.com/en-us/azure/private-link/private-link-faq

I tested for true just to check, same result.

This example is inspired from the doc: https://registry.terraform.io/providers/hashicorp/azurerm/latest/docs/resources/private_link_service

Can't deploy a privatelink service with Terraform

I do agree with fredrik for suggesting the same point.

The error you are encountered that subnet has private link service network policies enabled, which is preventing the creation of the private link service.

To resolve the issue, you should disable the private link service network policies for the subnet by setting the private_link_service_network_policies_enabled = false within the subnet module.

    provider "azurerm" {
      features {}
    }
    
    resource "azurerm_resource_group" "example" {
      name     = "RG7"
      location = "West Europe"
    }
    
    resource "azurerm_virtual_network" "example" {
      name                = "example-vnet"
      address_space       = ["10.5.0.0/16"]
      location            = azurerm_resource_group.example.location
      resource_group_name = azurerm_resource_group.example.name
    }
    
    resource "azurerm_subnet" "example" {
      name                                      = "example-subnet"
      resource_group_name                       = azurerm_resource_group.example.name
      virtual_network_name                      = azurerm_virtual_network.example.name
      address_prefixes                          = ["10.5.1.0/24"]
      private_endpoint_network_policies_enabled = false
      private_link_service_network_policies_enabled = false
    }
    
    
    resource "azurerm_public_ip" "example" {
      name                = "example-api"
      sku                 = "Standard"
      location            = azurerm_resource_group.example.location
      resource_group_name = azurerm_resource_group.example.name
      allocation_method   = "Static"
    }
    
    resource "azurerm_lb" "example" {
      name                = "example-lb"
      sku                 = "Standard"
      location            = azurerm_resource_group.example.location
      resource_group_name = azurerm_resource_group.example.name
    
      frontend_ip_configuration {
        name                 = azurerm_public_ip.example.name
        public_ip_address_id = azurerm_public_ip.example.id
      }
    }
    
    resource "azurerm_private_link_service" "example" {
      name                                        = "example-privatelink"
      location                                    = azurerm_resource_group.example.location
      resource_group_name                         = azurerm_resource_group.example.name
      load_balancer_frontend_ip_configuration_ids = [azurerm_lb.example.frontend_ip_configuration[0].id]
      auto_approval_subscription_ids              = ["b83c1ed3-c5b6-44fb-b5ba-2b83a074c23f"]
      visibility_subscription_ids                 = ["b83c1ed3-c5b6-44fb-b5ba-2b83a074c23f"]
    
      nat_ip_configuration {
        name               = "primary"
        subnet_id          = azurerm_subnet.example.id
        primary            = true
        private_ip_address = "10.5.1.17"
      }
    
      nat_ip_configuration {
        name                       = "secondary"
        private_ip_address         = "10.5.1.18"
        private_ip_address_version = "IPv4"
        subnet_id                  = azurerm_subnet.example.id
        primary                    = false
      }
    }

Terraform apply result, without using the private_link_service_network_policies_enabled = false in the subnet module.

Terraform apply result, after setting private_link_service_network_policies_enabled = false in the subnet module

Reference: azurerm_subnet