diff --git a/staging/src/k8s.io/legacy-cloud-providers/azure/azure.go b/staging/src/k8s.io/legacy-cloud-providers/azure/azure.go
index 461ef3171cc..928532ceb4c 100644
--- a/staging/src/k8s.io/legacy-cloud-providers/azure/azure.go
+++ b/staging/src/k8s.io/legacy-cloud-providers/azure/azure.go
@@ -41,7 +41,6 @@ import (
 	"k8s.io/client-go/tools/cache"
 	"k8s.io/client-go/tools/record"
 	cloudprovider "k8s.io/cloud-provider"
-	cloudproviderapi "k8s.io/cloud-provider/api"
 	"k8s.io/klog/v2"
 	"k8s.io/legacy-cloud-providers/azure/auth"
 	azcache "k8s.io/legacy-cloud-providers/azure/cache"
@@ -858,14 +857,6 @@ func (az *Cloud) updateNodeCaches(prevNode, newNode *v1.Node) {
 		case hasExcludeBalancerLabel:
 			az.excludeLoadBalancerNodes.Insert(newNode.ObjectMeta.Name)
 
-		case !isNodeReady(newNode) && getCloudTaint(newNode.Spec.Taints) == nil:
-			// If not in ready state and not a newly created node, add to excludeLoadBalancerNodes cache.
-			// New nodes (tainted with "node.cloudprovider.kubernetes.io/uninitialized") should not be
-			// excluded from load balancers regardless of their state, so as to reduce the number of
-			// VMSS API calls and not provoke VMScaleSetActiveModelsCountLimitReached.
-			// (https://github.com/kubernetes-sigs/cloud-provider-azure/issues/851)
-			az.excludeLoadBalancerNodes.Insert(newNode.ObjectMeta.Name)
-
 		default:
 			// Nodes not falling into the three cases above are valid backends and
 			// should not appear in excludeLoadBalancerNodes cache.
@@ -995,21 +986,3 @@ func (az *Cloud) ShouldNodeExcludedFromLoadBalancer(nodeName string) (bool, erro
 
 	return az.excludeLoadBalancerNodes.Has(nodeName), nil
 }
-
-func isNodeReady(node *v1.Node) bool {
-	for _, cond := range node.Status.Conditions {
-		if cond.Type == v1.NodeReady && cond.Status == v1.ConditionTrue {
-			return true
-		}
-	}
-	return false
-}
-
-func getCloudTaint(taints []v1.Taint) *v1.Taint {
-	for _, taint := range taints {
-		if taint.Key == cloudproviderapi.TaintExternalCloudProvider {
-			return &taint
-		}
-	}
-	return nil
-}
diff --git a/staging/src/k8s.io/legacy-cloud-providers/azure/azure_test.go b/staging/src/k8s.io/legacy-cloud-providers/azure/azure_test.go
index 1d651f34ca5..4b3ff47d4e3 100644
--- a/staging/src/k8s.io/legacy-cloud-providers/azure/azure_test.go
+++ b/staging/src/k8s.io/legacy-cloud-providers/azure/azure_test.go
@@ -3313,7 +3313,7 @@ func TestUpdateNodeCacheExcludeLoadBalancer(t *testing.T) {
 	az.updateNodeCaches(&prevNode, &newNode)
 	assert.Equal(t, 1, len(az.excludeLoadBalancerNodes))
 
-	// a non-ready node should be excluded
+	// a non-ready node should be included
 	az.unmanagedNodes = sets.NewString()
 	az.excludeLoadBalancerNodes = sets.NewString()
 	az.nodeNames = sets.NewString()
@@ -3334,9 +3334,9 @@ func TestUpdateNodeCacheExcludeLoadBalancer(t *testing.T) {
 		},
 	}
 	az.updateNodeCaches(nil, &nonReadyNode)
-	assert.Equal(t, 1, len(az.excludeLoadBalancerNodes))
+	assert.Equal(t, 0, len(az.excludeLoadBalancerNodes))
 
-	// node becomes ready, it should be removed from az.excludeLoadBalancerNodes
+	// node becomes ready => no impact on az.excludeLoadBalancerNodes
 	readyNode := v1.Node{
 		ObjectMeta: metav1.ObjectMeta{
 			Labels: map[string]string{