cluster-api: [KCP] Fails to upgrade single node control plane

What steps did you take and what happened: On a single-node control-plane, I upgraded kubernetes version, etcd and CoreDNS image tags by modifying KCP object. New node with upgraded Kubernetes version is created, old node is physically deleted but old node object and all pods that was on the old pod are dangling.

root@cluster-tvnb5a-cluster-tvnb5a-control-plane-cdrtr:/# kubectl get nodes -A
NAME                                                  STATUS     ROLES    AGE     VERSION
cluster-tvnb5a-cluster-tvnb5a-control-plane-9jqkj     NotReady   master   7m11s   v1.17.0
cluster-tvnb5a-cluster-tvnb5a-control-plane-cdrtr     Ready      master   6m20s   v1.17.2
cluster-tvnb5a-cluster-tvnb5a-md-0-66496845f6-kvh9v   Ready      <none>   6m51s   v1.17.0
root@cluster-tvnb5a-cluster-tvnb5a-control-plane-cdrtr:/# kubectl get pods -A
NAMESPACE     NAME                                                                        READY   STATUS             RESTARTS   AGE
kube-system   coredns-6955765f44-dpwvr                                                    1/1     Terminating        0          7m12s
kube-system   coredns-6955765f44-g4df6                                                    1/1     Terminating        0          7m12s
kube-system   coredns-7987b8d68f-f2d78                                                    1/1     Running            0          4m24s
kube-system   coredns-7987b8d68f-rftvl                                                    1/1     Running            0          4m23s
kube-system   etcd-cluster-tvnb5a-cluster-tvnb5a-control-plane-9jqkj                      0/1     CrashLoopBackOff   3          7m16s
kube-system   etcd-cluster-tvnb5a-cluster-tvnb5a-control-plane-cdrtr                      1/1     Running            0          6m19s
kube-system   kindnet-s6rvq                                                               1/1     Running            0          7m8s
kube-system   kindnet-wmxqx                                                               1/1     Running            0          6m37s
kube-system   kindnet-xvdks                                                               1/1     Running            0          7m12s
kube-system   kube-apiserver-cluster-tvnb5a-cluster-tvnb5a-control-plane-9jqkj            1/1     Running            0          7m16s
kube-system   kube-apiserver-cluster-tvnb5a-cluster-tvnb5a-control-plane-cdrtr            1/1     Running            0          6m36s
kube-system   kube-controller-manager-cluster-tvnb5a-cluster-tvnb5a-control-plane-9jqkj   1/1     Running            1          7m16s
kube-system   kube-controller-manager-cluster-tvnb5a-cluster-tvnb5a-control-plane-cdrtr   1/1     Running            0          6m35s
kube-system   kube-proxy-gfghs                                                            1/1     Running            0          4m22s
kube-system   kube-proxy-lj9lv                                                            1/1     Terminating        0          7m12s
kube-system   kube-proxy-qlgpw                                                            1/1     Running            0          3m57s
kube-system   kube-scheduler-cluster-tvnb5a-cluster-tvnb5a-control-plane-9jqkj            1/1     Running            1          7m16s
kube-system   kube-scheduler-cluster-tvnb5a-cluster-tvnb5a-control-plane-cdrtr            1/1     Running            0          6m35s
root@cluster-tvnb5a-cluster-tvnb5a-control-plane-cdrtr:/#

What did you expect to happen: I expected KCP to remove node object and cleanup resources that was on that node.

/kind bug /area control-plane