cosmos-sdk: [Bug]: Upgrade from v0.47.1 -> v0.47.2 causing issues

Summary of Bug

When upgrading from cosmos-sdk@v0.47.1 to cosmos-sdk@v0.47.2 and starting a new testnet, the testnet fails to start and produce blocks.

The same steps worked previously in cosmos-sdk@v0.47.1. After the upgrade, no blocks are being created and no obvious error messages are being produced. The best I have is the output of the status.

# curl -S localhost:26657/status | json_pp
  % Total    % Received % Xferd  Average Speed   Time    Time     Time  Current
                                 Dload  Upload   Total   Spent    Left  Speed
100   839  100   839    0     0  26764      0 --:--:-- --:--:-- --:--:-- 27966
{
   "id" : -1,
   "jsonrpc" : "2.0",
   "result" : {
      "node_info" : {
         "channels" : "40202122233038606100",
         "id" : "01038f88c61bbfdf38c79a6c50b207fcd1ee70f3",
         "listen_addr" : "192.168.56.21:26656",
         "moniker" : "paloma-priv-testnet-m1",
         "network" : "private-mousedove-432E2A",
         "other" : {
            "rpc_address" : "tcp://0.0.0.0:26657",
            "tx_index" : "on"
         },
         "protocol_version" : {
            "app" : "0",
            "block" : "11",
            "p2p" : "8"
         },
         "version" : "0.37.1"
      },
      "sync_info" : {
         "catching_up" : false,
         "earliest_app_hash" : "",
         "earliest_block_hash" : "",
         "earliest_block_height" : "0",
         "earliest_block_time" : "1970-01-01T00:00:00Z",
         "latest_app_hash" : "",
         "latest_block_hash" : "",
         "latest_block_height" : "0",
         "latest_block_time" : "1970-01-01T00:00:00Z"
      },
      "validator_info" : {
         "address" : "51BF73BFE54368893D50076B417B86DE71FE12E6",
         "pub_key" : {
            "type" : "tendermint/PubKeyEd25519",
            "value" : "pVW282uuYLl2NH82B8heC5GzN6B21cbCY0ATqDPm0Qo="
         },
         "voting_power" : "10000"
      }
   }
}

There are occasionally error messages, but they don’t seem overly concerning as it’s a host trying to add itself to the address book.

Failed to add new address
Cannot add ourselves with address 58efc00dab37e2d74a11bf846ad1b8934922368c@192.168.56.23:26656

Version

v0.47.2

Steps to Reproduce

This was found in palomachain. To reproduce, upgrade cosmos-sdk and cometbtf there and start up a new testnet. I suspect it may be reproducible in other cosmos apps, but I have not tried.

To further show issues, you can try submitting a proposal. We are submitting as such:

palomad tx gov submit-legacy-proposal evm propose-new-chain bnb-main 56 1000000 24532924 0x746f51c42fc732c46beda0be2f58d74512841eac93fa4ee5512f77938eec7bf5 \
      --title "Support for Binance Smartchain Mainnet on $CHAIN_ID" \
      --description "Add Binance Smart Chain mainnet as supported chain." \
      --deposit 10000000ugrain \
      --fees 400ugrain \
      --gas auto \
      --from="$ADDRESS" \
      --yes

And it returns

Error: rpc error: code = Unknown desc = paloma is not ready; please wait for first block: invalid height