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When you try to create an AKS Arc cluster from the Azure portal, you can see that there are no VM sizes listed. This can happen if the skus/default resource in Azure is not yet created, or was deleted for some reason. This scenario can happen in Azure Local releases 2408 or older, when the default resource was not created as a part of the Azure Local deployment.
Workaround
Run the following command:
$cl_id = "/subscriptions/<subscription_id>/resourceGroups/<resource_group_name>/providers/Microsoft.ExtendedLocation/customLocations/<custom_location_name>"
# Get the VM sizes using CLI (it automatically creates the **skus/default** Azure resource).
az aksarc vmsize list --custom-location $cl_id
Validation
Verify that Azure portal now displays the correct list of VM sizes.