VMSS instance stuck in Creating state if the instance is deleted in Custom Script Extension

I have a VMSS deployed as part of a resource group deployment. I have also configured Custom Script Extensions for VMSS. The script deletes the instance (same instance where Custom script extension is running) if it finds some application issues so that VMSS can set up a brand new instance.

I have noticed a strange behavior in VMSS. All instance but one fails to come up during this process. The status of the instance which fails to come up always remains in Creating(Running) state. From the logs I have observed that there will always be one instance which fails to execute the custom script.

LOG ERROR:
Message
Enable failed: failed to execute command: command terminated with exit status=1 [stdout]