Thank you for your comment.
I created and provisioned an OS image of RHEL 9.5 (cloud-init version is 23.4-19.el9) in the PowerVC 2.2.0 environment that I am using. The VM has been created, cloud-init has been worked well, and the OS has been confirmed to be booted.
It's not PowerVC 2.3, but I'm guessing it will work as well on 2.3.