Unable to update policy exemption update using "Set-AzPolicyExemption" PowerShell cmdlet

### Description

When trying to update a policy exemption using the "Set-AzPolicyExemption" PowerShell cmdlet, the following error is thrown: "InvalidPolicyDefinitionReference : The policy exemption '2bb37db403eb46e5a5644de9' create request is invalid. The associated policy assignment is an assignment of a policy definition. The policy definition reference is only valid for policy assignments of policy set definitions.".

When using the -Debug parameter, checked that the HTTP request for [Policy Exemptions - Create Or Update - REST API (Azure Policy)](https://learn.microsoft.com/en-us/rest/api/policy/policy-exemptions/create-or-update?view=rest-policy-2022-07-01-preview&tabs=HTTP). E.g.:

Body:
{
"properties": {
"policyAssignmentId": "/subscriptions/d926280d-abb2-4fb3-a5d8-262c8da77c2e/providers/Microsoft.Authorization/policyAssignments/fa3355e8b0274269be1a5aef",
**"policyDefinitionReferenceIds": [
"[]"
]**,
"exemptionCategory": "Waiver",
"displayName": "InternalSubscription-joaosa-Webapplogs",
"description": "a",
"metadata": {}
},
"name": "2bb37db403eb46e5a5644de9"
}

The property "policyDefinitionReferenceIds"'s value is an array with an empty array. HTTP response code: 400.

E.g. when using the Azure Portal:

Body:

{
"properties": {
"policyAssignmentId": "/subscriptions/d926280d-abb2-4fb3-a5d8-262c8da77c2e/providers/Microsoft.Authorization/policyAssignments/fa3355e8b0274269be1a5aef",
**"policyDefinitionReferenceIds": []**,
"exemptionCategory": "Waiver",
"expiresOn": null,
"displayName": "Internal Subscription - joaosa - Web app logs",
"description": "",
"metadata": {},
"resourceSelectors": []
}

}

The property "policyDefinitionReferenceIds"'s value is an empty array. HTTP response code: 200.

### Issue script & Debug output

```PowerShell
DEBUG: 10:49:17 - SetAzurePolicyExemptionCmdlet begin processing with ParameterSet 'IdParameterSet'.
DEBUG: 10:49:17 - using account id 'pii'...
DEBUG: 10:49:17 - [ConfigManager] Got [False] from [DisplayBreakingChangeWarning], Module = [], Cmdlet = [].
DEBUG: [Common.Authentication]: Authenticating using Account: 'pii', environment: 'AzureCloud', tenant: '72f988bf-86f1-41af-91ab-2d7cd011db47'
DEBUG: 10:49:17 - [SilentAuthenticator] Calling SharedTokenCacheCredential.GetTokenAsync - TenantId:'72f988bf-86f1-41af-91ab-2d7cd011db47', Scopes:'https://management.core.windows.net//.default',
AuthorityHost:'https://login.microsoftonline.com/', UserId:'pii'
DEBUG: SharedTokenCacheCredential.GetToken invoked. Scopes: [ https://management.core.windows.net//.default ] ParentRequestId:
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 716a5453-bb93-4f25-bb40-e5221c559188] IsLegacyAdalCacheEnabled: yes
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 716a5453-bb93-4f25-bb40-e5221c559188] [Region discovery] Not using a regional authority.
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 716a5453-bb93-4f25-bb40-e5221c559188] [Region discovery] Not using a regional authority.
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 716a5453-bb93-4f25-bb40-e5221c559188] [Region discovery] Not using a regional authority.
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 716a5453-bb93-4f25-bb40-e5221c559188] [Region discovery] Not using a regional authority.
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 716a5453-bb93-4f25-bb40-e5221c559188] IsLegacyAdalCacheEnabled: yes
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 716a5453-bb93-4f25-bb40-e5221c559188] IsLegacyAdalCacheEnabled: yes
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z] Found 3 cache accounts and 0 broker accounts
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z] Returning 3 accounts
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 0be0bf1b-ae5f-494e-aa67-cb774e2cd041] MSAL MSAL.Desktop with assembly version '4.46.2.0'. Correl
ationId(0be0bf1b-ae5f-494e-aa67-cb774e2cd041)
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 0be0bf1b-ae5f-494e-aa67-cb774e2cd041] === AcquireTokenSilent Parameters ===
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 0be0bf1b-ae5f-494e-aa67-cb774e2cd041] LoginHint provided: False
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 0be0bf1b-ae5f-494e-aa67-cb774e2cd041] Account provided: True
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 0be0bf1b-ae5f-494e-aa67-cb774e2cd041] ForceRefresh: False
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 0be0bf1b-ae5f-494e-aa67-cb774e2cd041]
=== Request Data ===
Authority Provided? - True
Scopes - https://management.core.windows.net//.default
Extra Query Params Keys (space separated) -
ApiId - AcquireTokenSilent
IsConfidentialClient - False
SendX5C - False
LoginHint ? False
IsBrokerConfigured - False
HomeAccountId - False
CorrelationId - 0be0bf1b-ae5f-494e-aa67-cb774e2cd041
UserAssertion set: False
LongRunningOboCacheKey set: False
Region configured:

DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 0be0bf1b-ae5f-494e-aa67-cb774e2cd041] === Token Acquisition (SilentRequest) started:
Scopes: https://management.core.windows.net//.default
Authority Host: login.microsoftonline.com
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 0be0bf1b-ae5f-494e-aa67-cb774e2cd041] [Region discovery] Not using a regional authority.
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 0be0bf1b-ae5f-494e-aa67-cb774e2cd041] Access token is not expired. Returning the found cache ent
ry. [Current time (11/30/2023 10:49:17) - Expiration Time (11/30/2023 11:05:06 +00:00) - Extended Expiration Time (11/30/2023 11:05:06 +00:00)]
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 0be0bf1b-ae5f-494e-aa67-cb774e2cd041] Returning access token found in cache. RefreshOn exists ?
False
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 0be0bf1b-ae5f-494e-aa67-cb774e2cd041] [Region discovery] Not using a regional authority.
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 0be0bf1b-ae5f-494e-aa67-cb774e2cd041]
=== Token Acquisition finished successfully:
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 0be0bf1b-ae5f-494e-aa67-cb774e2cd041] AT expiration time: 30/11/2023 11:05:06 +00:00, scopes: h
ttps://management.core.windows.net//user_impersonation https://management.core.windows.net//.default. source: Cache
DEBUG: SharedTokenCacheCredential.GetToken succeeded. Scopes: [ https://management.core.windows.net//.default ] ParentRequestId: ExpiresOn: 2023-11-30T11:05:06.0000000+00:00
DEBUG: [Common.Authentication]: Received token with LoginType 'User', Tenant: '72f988bf-86f1-41af-91ab-2d7cd011db47', UserId: 'pii'
DEBUG: [Common.Authentication]: Authenticating using Account: 'pii', environment: 'AzureCloud', tenant: '72f988bf-86f1-41af-91ab-2d7cd011db47'
DEBUG: 10:49:17 - [SilentAuthenticator] Calling SharedTokenCacheCredential.GetTokenAsync - TenantId:'72f988bf-86f1-41af-91ab-2d7cd011db47', Scopes:'https://management.core.windows.net//.default',
AuthorityHost:'https://login.microsoftonline.com/', UserId:'pii'
DEBUG: SharedTokenCacheCredential.GetToken invoked. Scopes: [ https://management.core.windows.net//.default ] ParentRequestId:
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 49f8ec0d-276f-460d-bdf2-0fb3b9d9169f] IsLegacyAdalCacheEnabled: yes
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 49f8ec0d-276f-460d-bdf2-0fb3b9d9169f] [Region discovery] Not using a regional authority.
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 49f8ec0d-276f-460d-bdf2-0fb3b9d9169f] [Region discovery] Not using a regional authority.
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 49f8ec0d-276f-460d-bdf2-0fb3b9d9169f] [Region discovery] Not using a regional authority.
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 49f8ec0d-276f-460d-bdf2-0fb3b9d9169f] [Region discovery] Not using a regional authority.
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 49f8ec0d-276f-460d-bdf2-0fb3b9d9169f] IsLegacyAdalCacheEnabled: yes
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 49f8ec0d-276f-460d-bdf2-0fb3b9d9169f] IsLegacyAdalCacheEnabled: yes
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z] Found 3 cache accounts and 0 broker accounts
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z] Returning 3 accounts
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 380f6e18-70a3-4687-abcf-7f113d31c08d] MSAL MSAL.Desktop with assembly version '4.46.2.0'. Correl
ationId(380f6e18-70a3-4687-abcf-7f113d31c08d)
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 380f6e18-70a3-4687-abcf-7f113d31c08d] === AcquireTokenSilent Parameters ===
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 380f6e18-70a3-4687-abcf-7f113d31c08d] LoginHint provided: False
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 380f6e18-70a3-4687-abcf-7f113d31c08d] Account provided: True
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 380f6e18-70a3-4687-abcf-7f113d31c08d] ForceRefresh: False
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 380f6e18-70a3-4687-abcf-7f113d31c08d]
=== Request Data ===
Authority Provided? - True
Scopes - https://management.core.windows.net//.default
Extra Query Params Keys (space separated) -
ApiId - AcquireTokenSilent
IsConfidentialClient - False
SendX5C - False
LoginHint ? False
IsBrokerConfigured - False
HomeAccountId - False
CorrelationId - 380f6e18-70a3-4687-abcf-7f113d31c08d
UserAssertion set: False
LongRunningOboCacheKey set: False
Region configured:

DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 380f6e18-70a3-4687-abcf-7f113d31c08d] === Token Acquisition (SilentRequest) started:
Scopes: https://management.core.windows.net//.default
Authority Host: login.microsoftonline.com
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 380f6e18-70a3-4687-abcf-7f113d31c08d] [Region discovery] Not using a regional authority.
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 380f6e18-70a3-4687-abcf-7f113d31c08d] Access token is not expired. Returning the found cache ent
ry. [Current time (11/30/2023 10:49:17) - Expiration Time (11/30/2023 11:05:06 +00:00) - Extended Expiration Time (11/30/2023 11:05:06 +00:00)]
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 380f6e18-70a3-4687-abcf-7f113d31c08d] Returning access token found in cache. RefreshOn exists ?
False
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 380f6e18-70a3-4687-abcf-7f113d31c08d] [Region discovery] Not using a regional authority.
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 380f6e18-70a3-4687-abcf-7f113d31c08d]
=== Token Acquisition finished successfully:
DEBUG: False MSAL 4.46.2.0 MSAL.Desktop 4.8 or later Windows 10 Enterprise [2023-11-30 10:49:17Z - 380f6e18-70a3-4687-abcf-7f113d31c08d] AT expiration time: 30/11/2023 11:05:06 +00:00, scopes: h
ttps://management.core.windows.net//user_impersonation https://management.core.windows.net//.default. source: Cache
DEBUG: SharedTokenCacheCredential.GetToken succeeded. Scopes: [ https://management.core.windows.net//.default ] ParentRequestId: ExpiresOn: 2023-11-30T11:05:06.0000000+00:00
DEBUG: [Common.Authentication]: Received token with LoginType 'User', Tenant: '72f988bf-86f1-41af-91ab-2d7cd011db47', UserId: 'pii'
DEBUG: ============================ HTTP REQUEST ============================

HTTP Method:
GET

Absolute Uri:
https://management.azure.com/subscriptions/d926280d-abb2-4fb3-a5d8-262c8da77c2e/providers/Microsoft.Authorization/policyExemptions/2bb37db403eb46e5a5644de9?api-version=2020-07-01-preview

Headers:
User-Agent : AzurePowershell/v0.0.0,PSVersion/v5.1.22621.2506,Az.Resources/6.5.0
ParameterSetName : IdParameterSet
CommandName : Set-AzPolicyExemption

Body:

DEBUG: ============================ HTTP RESPONSE ============================

Status Code:
OK

Headers:
Pragma : no-cache
Strict-Transport-Security : max-age=31536000; includeSubDomains
x-ms-ratelimit-remaining-subscription-reads: 11997
x-ms-request-id : 9511e987-c246-4d06-9402-82e66c343a20
x-ms-correlation-request-id : 9511e987-c246-4d06-9402-82e66c343a20
x-ms-routing-request-id : FRANCECENTRAL:20231130T104917Z:9511e987-c246-4d06-9402-82e66c343a20
X-Content-Type-Options : nosniff
Cache-Control : no-cache
Date : Thu, 30 Nov 2023 10:49:17 GMT
Server : Kestrel

Body:
{
"properties": {
"policyAssignmentId": "/subscriptions/d926280d-abb2-4fb3-a5d8-262c8da77c2e/providers/Microsoft.Authorization/policyAssignments/fa3355e8b0274269be1a5aef",
"policyDefinitionReferenceIds": [],
"exemptionCategory": "Waiver",
"displayName": "Internal Subscription - joaosa - Web app logs",
"description": "",
"metadata": {}
},
"id": "/subscriptions/d926280d-abb2-4fb3-a5d8-262c8da77c2e/providers/Microsoft.Authorization/policyExemptions/2bb37db403eb46e5a5644de9",
"type": "Microsoft.Authorization/policyExemptions",
"name": "2bb37db403eb46e5a5644de9",
"systemData": {
"createdBy": "pii",
"createdByType": "User",
"createdAt": "2023-11-29T12:22:02.4916082Z",
"lastModifiedBy": "pii",
"lastModifiedByType": "User",
"lastModifiedAt": "2023-11-29T14:16:42.9424511Z"
}
}

DEBUG: ============================ HTTP REQUEST ============================

HTTP Method:
PUT

Absolute Uri:
https://management.azure.com/subscriptions/d926280d-abb2-4fb3-a5d8-262c8da77c2e/providers/Microsoft.Authorization/policyExemptions/2bb37db403eb46e5a5644de9?api-version=2020-07-01-preview

Headers:
User-Agent : AzurePowershell/v0.0.0,PSVersion/v5.1.22621.2506,Az.Resources/6.5.0
ParameterSetName : IdParameterSet
CommandName : Set-AzPolicyExemption

Body:
{
"properties": {
"policyAssignmentId": "/subscriptions/d926280d-abb2-4fb3-a5d8-262c8da77c2e/providers/Microsoft.Authorization/policyAssignments/fa3355e8b0274269be1a5aef",
"policyDefinitionReferenceIds": [
"[]"
],
"exemptionCategory": "Waiver",
"displayName": "InternalSubscription-joaosa-Webapplogs",
"description": "a",
"metadata": {}
},
"name": "2bb37db403eb46e5a5644de9"
}

DEBUG: ============================ HTTP RESPONSE ============================

Status Code:
BadRequest

Headers:
Pragma : no-cache
x-ms-ratelimit-remaining-subscription-writes: 1199
x-ms-request-id : 99d1582f-baf6-4428-ac64-e14a2dcb2009
x-ms-correlation-request-id : 99d1582f-baf6-4428-ac64-e14a2dcb2009
x-ms-routing-request-id : FRANCECENTRAL:20231130T104917Z:99d1582f-baf6-4428-ac64-e14a2dcb2009
Strict-Transport-Security : max-age=31536000; includeSubDomains
X-Content-Type-Options : nosniff
Cache-Control : no-store, no-cache
Date : Thu, 30 Nov 2023 10:49:17 GMT
Server : Kestrel

Body:
{
"error": {
"code": "InvalidPolicyDefinitionReference",
"message": "The policy exemption '2bb37db403eb46e5a5644de9' create request is invalid. The associated policy assignment is an assignment of a policy definition. The policy definition referenc
e is only valid for policy assignments of policy set definitions."
}
}

DEBUG: 10:49:17 - [ConfigManager] Got [True] from [EnableDataCollection], Module = [], Cmdlet = [].
Set-AzPolicyExemption : InvalidPolicyDefinitionReference : The policy exemption '2bb37db403eb46e5a5644de9' create request is invalid. The associated policy assignment is an assignment of a
policy definition. The policy definition reference is only valid for policy assignments of policy set definitions.
CorrelationId: 99d1582f-baf6-4428-ac64-e14a2dcb2009
At line:1 char:1
+ Set-AzPolicyExemption -ResourceId "/subscriptions/d926280d-abb2-4fb3- ...
+ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
+ CategoryInfo : CloseError: (:) [Set-AzPolicyExemption], ErrorResponseMessageException
+ FullyQualifiedErrorId : Microsoft.Azure.Commands.ResourceManager.Cmdlets.Implementation.SetAzurePolicyExemptionCmdlet

DEBUG: 10:49:18 - [ConfigManager] Got [False] from [DisplayBreakingChangeWarning], Module = [], Cmdlet = [].
DEBUG: AzureQoSEvent: Module: Az.Resources:6.5.0; CommandName: Set-AzPolicyExemption; PSVersion: 5.1.22621.2506; IsSuccess: False; Duration: 00:00:00.5764128; Exception: InvalidPolicyDefinitionR
eference : The policy exemption '2bb37db403eb46e5a5644de9' create request is invalid. The associated policy assignment is an assignment of a policy definition. The policy definition reference is
only valid for policy assignments of policy set definitions.
CorrelationId: 99d1582f-baf6-4428-ac64-e14a2dcb2009;
DEBUG: 10:49:18 - SetAzurePolicyExemptionCmdlet end processing.
```

### Environment data

```PowerShell
Name Value
---- -----
PSVersion 5.1.22621.2506
PSEdition Desktop
PSCompatibleVersions {1.0, 2.0, 3.0, 4.0...}
BuildVersion 10.0.22621.2506
CLRVersion 4.0.30319.42000
WSManStackVersion 3.0
PSRemotingProtocolVersion 2.3
SerializationVersion 1.1.0.1
```

### Module versions

```PowerShell
ModuleType Version Name ExportedCommands
---------- ------- ---- ----------------
Script 2.10.4 Az.Accounts {Add-AzEnvironment, Clear-AzConfig, Clear-AzContext, Clear-AzDefault...}
Script 6.5.0 Az.Resources {Export-AzResourceGroup, Export-AzTemplateSpec, Get-AzDenyAssignment, Get-AzDeployment...}
```

### Error output

```PowerShell
DEBUG: 10:50:24 - ResolveError begin processing with ParameterSet 'AnyErrorParameterSet'.
DEBUG: 10:50:24 - using account id 'pii'...
DEBUG: 10:50:24 - [ConfigManager] Got [False] from [DisplayBreakingChangeWarning], Module = [], Cmdlet = [].

HistoryId: 4

Message : InvalidPolicyDefinitionReference : The policy exemption '2bb37db403eb46e5a5644de9' create request is invalid. The associated policy assignment is an assignment of a policy
definition. The policy definition reference is only valid for policy assignments of policy set definitions.
CorrelationId: 99d1582f-baf6-4428-ac64-e14a2dcb2009
StackTrace : at Microsoft.Azure.Commands.ResourceManager.Cmdlets.Implementation.ResourceManagerCmdletBase.HandleException(ExceptionDispatchInfo capturedException)
at Microsoft.Azure.Commands.ResourceManager.Cmdlets.Implementation.ResourceManagerCmdletBase.ExecuteCmdlet()
at Microsoft.WindowsAzure.Commands.Utilities.Common.AzurePSCmdlet.ProcessRecord()
Exception : Microsoft.Azure.Commands.ResourceManager.Cmdlets.Entities.ErrorResponses.ErrorResponseMessageException
InvocationInfo : {Set-AzPolicyExemption}
Line : Set-AzPolicyExemption -ResourceId "/subscriptions/d926280d-abb2-4fb3-a5d8-262c8da77c2e/providers/Microsoft.Authorization/policyExemptions/2bb37db403eb46e5a5644de9" -Description
"a"
Position : At line:1 char:1
+ Set-AzPolicyExemption -ResourceId "/subscriptions/d926280d-abb2-4fb3- ...
+ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
HistoryId : 4

HistoryId: 2

Message : InvalidPolicyDefinitionReference : The policy exemption '2bb37db403eb46e5a5644de9' create request is invalid. The associated policy assignment is an assignment of a policy
definition. The policy definition reference is only valid for policy assignments of policy set definitions.
CorrelationId: efa3e393-df68-4a59-9f7d-a424aeab6d1e
StackTrace : at Microsoft.Azure.Commands.ResourceManager.Cmdlets.Implementation.ResourceManagerCmdletBase.HandleException(ExceptionDispatchInfo capturedException)
at Microsoft.Azure.Commands.ResourceManager.Cmdlets.Implementation.ResourceManagerCmdletBase.ExecuteCmdlet()
at Microsoft.WindowsAzure.Commands.Utilities.Common.AzurePSCmdlet.ProcessRecord()
Exception : Microsoft.Azure.Commands.ResourceManager.Cmdlets.Entities.ErrorResponses.ErrorResponseMessageException
InvocationInfo : {Set-AzPolicyExemption}
Line : Set-AzPolicyExemption -ResourceId "/subscriptions/d926280d-abb2-4fb3-a5d8-262c8da77c2e/providers/Microsoft.Authorization/policyExemptions/2bb37db403eb46e5a5644de9" -Description
"a"
Position : At line:1 char:1
+ Set-AzPolicyExemption -ResourceId "/subscriptions/d926280d-abb2-4fb3- ...
+ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
HistoryId : 2

The Azure PowerShell team is listening, please let us know how we are doing: https://aka.ms/azpssurvey?Q_CHL=ERROR.

DEBUG: AzureQoSEvent: Module: Az.Accounts:2.10.4; CommandName: Resolve-AzError; PSVersion: 5.1.22621.2506; IsSuccess: True; Duration: 00:00:00.1435075
DEBUG: 10:50:24 - [ConfigManager] Got [True] from [EnableDataCollection], Module = [], Cmdlet = [].
DEBUG: 10:50:24 - ResolveError end processing.
```

Start by reproducing the failure with the Set-AzPolicyExemption cmdlet and compare its debug request with the Policy Exemptions - Create Or Update REST API example and the Azure Portal request. Done means updating an exemption for a policy-definition assignment succeeds and sends policyDefinitionReferenceIds as an empty array rather than an array containing an empty array.

Written by the indexing model from the issue text.