I did several experiments, I made sure there were no machines defined

$ for i in 30 31 32; do ssh 10.244.40.$i lxc list ; done
Warning: Permanently added '10.244.40.30' (ED25519) to the list of known hosts.
+------+-------+------+------+------+-----------+
| NAME | STATE | IPV4 | IPV6 | TYPE | SNAPSHOTS |
+------+-------+------+------+------+-----------+
Warning: Permanently added '10.244.40.31' (ED25519) to the list of known hosts.
To start your first container, try: lxc launch ubuntu:22.04
Or for a virtual machine: lxc launch ubuntu:22.04 --vm

+------+-------+------+------+------+-----------+
| NAME | STATE | IPV4 | IPV6 | TYPE | SNAPSHOTS |
+------+-------+------+------+------+-----------+
Warning: Permanently added '10.244.40.32' (ED25519) to the list of known hosts.
To start your first container, try: lxc launch ubuntu:22.04
Or for a virtual machine: lxc launch ubuntu:22.04 --vm

+------+-------+------+------+------+-----------+
| NAME | STATE | IPV4 | IPV6 | TYPE | SNAPSHOTS |
+------+-------+------+------+------+-----------+

Then ran the deployment

$ fce_wrap build --layer maas --steps compose_vms
2023-08-09-13:10:11 root DEBUG fce --debug build --layer maas --steps compose_vms
2023-08-09-13:10:11 root DEBUG FCE version: 2.21+git.10.g0acb2a1d
2023-08-09-13:10:11 root DEBUG Running 'zone' project check
2023-08-09-13:10:11 fce.build INFO Started building layer: maas
Warning: Permanently added '10.244.40.30' (ED25519) to the list of known hosts.
2023-08-09-13:10:12 fce.maas INFO Starting step: maas:compose_vms
2023-08-09-13:10:12 root DEBUG [localhost]: maas root vm-hosts read
2023-08-09-13:10:16 root DEBUG [localhost]: maas root version read
2023-08-09-13:10:19 root DEBUG [localhost]: maas root rack-controllers read hostname=leafeon
2023-08-09-13:10:24 root DEBUG [localhost]: maas root vm-host update 1 memory_over_commit_ratio=10 cpu_over_commit_ratio=10
2023-08-09-13:10:29 root DEBUG [localhost]: maas root machines read
2023-08-09-13:10:34 foundationcloudengine.layers.configuremaas INFO Creating elastic-1 in leafeon
2023-08-09-13:10:34 root DEBUG [localhost]: maas root vm-host compose 1 hostname=elastic-1 cores=2 memory=24576 storage=500.0 zone=2
2023-08-09-13:10:41 root DEBUG [localhost]: maas root tags create name=elastic
2023-08-09-13:10:44 root ERROR [localhost] Command failed: maas root tags create name=elastic
2023-08-09-13:10:44 root ERROR 1[localhost] STDOUT follows:
{"name": ["Tag with this Name already exists."]}
2023-08-09-13:10:44 root ERROR 2[localhost] STDERR follows:
b''
2023-08-09-13:10:44 root DEBUG [localhost]: maas root tag update-nodes elastic add=np6tyw
2023-08-09-13:10:48 foundationcloudengine.layers.configuremaas INFO Creating grafana-1 in leafeon
2023-08-09-13:10:48 root DEBUG [localhost]: maas root vm-host compose 1 hostname=grafana-1 cores=2 memory=3072 storage=40.0 zone=2
2023-08-09-13:10:54 root DEBUG [localhost]: maas root tags create name=grafana
2023-08-09-13:10:58 root ERROR [localhost] Command failed: maas root tags create name=grafana
2023-08-09-13:10:58 root ERROR 1[localhost] STDOUT follows:
{"name": ["Tag with this Name already exists."]}
2023-08-09-13:10:58 root ERROR 2[localhost] STDERR follows:
b''
2023-08-09-13:10:58 root DEBUG [localhost]: maas root tag update-nodes grafana add=gnxg47
2023-08-09-13:11:02 foundationcloudengine.layers.configuremaas INFO Creating juju-1 in leafeon
2023-08-09-13:11:02 root DEBUG [localhost]: maas root vm-host compose 1 hostname=juju-1 cores=8 memory=24576 storage=100.0 zone=2
2023-08-09-13:11:08 root DEBUG [localhost]: maas root tags create name=juju
2023-08-09-13:11:12 root ERROR [localhost] Command failed: maas root tags create name=juju
2023-08-09-13:11:12 root ERROR 1[localhost] STDOUT follows:
{"name": ["Tag with this Name already exists."]}
2023-08-09-13:11:12 root ERROR 2[localhost] STDERR follows:
b''
2023-08-09-13:11:12 root DEBUG [localhost]: maas root tag update-nodes juju add=nesx37
2023-08-09-13:11:16 foundationcloudengine.layers.configuremaas INFO Creating landscapeha-1 in leafeon
2023-08-09-13:11:16 root DEBUG [localhost]: maas root vm-host compose 1 hostname=landscapeha-1 cores=2 memory=3072 storage=40.0 zone=2
2023-08-09-13:11:21 root DEBUG [localhost]: maas root tags create name=landscapeha
2023-08-09-13:11:25 root ERROR [localhost] Command failed: maas root tags create name=landscapeha
2023-08-09-13:11:25 root ERROR 1[localhost] STDOUT follows:
{"name": ["Tag with this Name already exists."]}
2023-08-09-13:11:25 root ERROR 2[localhost] STDERR follows:
b''
2023-08-09-13:11:25 root DEBUG [localhost]: maas root tag update-nodes landscapeha add=6hsfn4
2023-08-09-13:11:29 foundationcloudengine.layers.configuremaas INFO Creating landscape-1 in leafeon
2023-08-09-13:11:29 root DEBUG [localhost]: maas root vm-host compose 1 hostname=landscape-1 cores=2 memory=4096 storage=40.0 zone=2
2023-08-09-13:11:34 root DEBUG [localhost]: maas root tags create name=landscape
2023-08-09-13:11:38 root ERROR [localhost] Command failed: maas root tags create name=landscape
2023-08-09-13:11:38 root ERROR 1[localhost] STDOUT follows:
{"name": ["Tag with this Name already exists."]}
2023-08-09-13:11:38 root ERROR 2[localhost] STDERR follows:
b''
2023-08-09-13:11:38 root DEBUG [localhost]: maas root tag update-nodes landscape add=xcrnhr
2023-08-09-13:11:42 foundationcloudengine.layers.configuremaas INFO Creating landscapesql-1 in leafeon
2023-08-09-13:11:42 root DEBUG [localhost]: maas root vm-host compose 1 hostname=landscapesql-1 cores=2 memory=16384 storage=100.0 zone=2
2023-08-09-13:11:47 root DEBUG [localhost]: maas root tags create name=landscapesql
2023-08-09-13:11:51 root ERROR [localhost] Command failed: maas root tags create name=landscapesql
2023-08-09-13:11:51 root ERROR 1[localhost] STDOUT follows:
{"name": ["Tag with this Name already exists."]}
2023-08-09-13:11:51 root ERROR 2[localhost] STDERR follows:
b''
2023-08-09-13:11:51 root DEBUG [localhost]: maas root tag update-nodes landscapesql add=fddbnk
2023-08-09-13:11:55 foundationcloudengine.layers.configuremaas INFO Creating landscapeamqp-1 in leafeon
2023-08-09-13:11:55 root DEBUG [localhost]: maas root vm-host compose 1 hostname=landscapeamqp-1 cores=2 memory=4096 storage=40.0 zone=2
2023-08-09-13:12:01 root DEBUG [localhost]: maas root tags create name=landscapeamqp
2023-08-09-13:12:05 root ERROR [localhost] Command failed: maas root tags create name=landscapeamqp
2023-08-09-13:12:05 root ERROR 1[localhost] STDOUT follows:
{"name": ["Tag with this Name already exists."]}
2023-08-09-13:12:05 root ERROR 2[localhost] STDERR follows:
b''
2023-08-09-13:12:05 root DEBUG [localhost]: maas root tag update-nodes landscapeamqp add=q77qfs
2023-08-09-13:12:08 foundationcloudengine.layers.configuremaas INFO Creating nagios-1 in leafeon
2023-08-09-13:12:08 root DEBUG [localhost]: maas root vm-host compose 1 hostname=nagios-1 cores=4 memory=3072 storage=40.0 zone=2
2023-08-09-13:12:14 root DEBUG [localhost]: maas root tags create name=nagios
2023-08-09-13:12:18 root ERROR [localhost] Command failed: maas root tags create name=nagios
2023-08-09-13:12:18 root ERROR 1[localhost] STDOUT follows:
{"name": ["Tag with this Name already exists."]}
2023-08-09-13:12:18 root ERROR 2[localhost] STDERR follows:
b''
2023-08-09-13:12:18 root DEBUG [localhost]: maas root tag update-nodes nagios add=faxnwc
2023-08-09-13:12:22 foundationcloudengine.layers.configuremaas INFO Creating graylog-1 in leafeon
2023-08-09-13:12:22 root DEBUG [localhost]: maas root vm-host compose 1 hostname=graylog-1 cores=4 memory=16384 storage=40.0 zone=2
2023-08-09-13:12:27 root ERROR [localhost] Command failed: maas root vm-host compose 1 hostname=graylog-1 cores=4 memory=16384 storage=40.0 zone=2
2023-08-09-13:12:27 root ERROR 1[localhost] STDOUT follows:
Unable to compose machine because: Failed talking to pod: Failed creating instance record: Add instance info to the database: This "instances" entry already exists
2023-08-09-13:12:27 root ERROR 2[localhost] STDERR follows:
b''


And here is a new status

$ for i in 30 31 32; do ssh 10.244.40.$i lxc list ; done
Warning: Permanently added '10.244.40.30' (ED25519) to the list of known hosts.
+-----------------+---------+----------------------+------+-----------------+-----------+
|      NAME       |  STATE  |         IPV4         | IPV6 |      TYPE       | SNAPSHOTS |
+-----------------+---------+----------------------+------+-----------------+-----------+
| elastic-1       | RUNNING | 10.244.40.119 (eth0) |      | VIRTUAL-MACHINE | 0         |
+-----------------+---------+----------------------+------+-----------------+-----------+
| grafana-1       | RUNNING | 10.244.40.158 (eth0) |      | VIRTUAL-MACHINE | 0         |
+-----------------+---------+----------------------+------+-----------------+-----------+
| graylog-1       | STOPPED |                      |      | VIRTUAL-MACHINE | 0         |
+-----------------+---------+----------------------+------+-----------------+-----------+
| juju-1          | RUNNING | 10.244.40.159 (eth0) |      | VIRTUAL-MACHINE | 0         |
+-----------------+---------+----------------------+------+-----------------+-----------+
| landscape-1     | RUNNING | 10.244.40.161 (eth0) |      | VIRTUAL-MACHINE | 0         |
+-----------------+---------+----------------------+------+-----------------+-----------+
| landscapeamqp-1 | RUNNING | 10.244.40.117 (eth0) |      | VIRTUAL-MACHINE | 0         |
+-----------------+---------+----------------------+------+-----------------+-----------+
| landscapeha-1   | RUNNING | 10.244.40.195 (eth0) |      | VIRTUAL-MACHINE | 0         |
|                 |         | 10.244.40.160 (eth0) |      |                 |           |
+-----------------+---------+----------------------+------+-----------------+-----------+
| landscapesql-1  | RUNNING | 10.244.40.116 (eth0) |      | VIRTUAL-MACHINE | 0         |
+-----------------+---------+----------------------+------+-----------------+-----------+
| nagios-1        | RUNNING | 10.244.40.193 (eth0) |      | VIRTUAL-MACHINE | 0         |
+-----------------+---------+----------------------+------+-----------------+-----------+
Warning: Permanently added '10.244.40.31' (ED25519) to the list of known hosts.
+------+-------+------+------+------+-----------+
| NAME | STATE | IPV4 | IPV6 | TYPE | SNAPSHOTS |
+------+-------+------+------+------+-----------+
Warning: Permanently added '10.244.40.32' (ED25519) to the list of known hosts.
+------+-------+------+------+------+-----------+
| NAME | STATE | IPV4 | IPV6 | TYPE | SNAPSHOTS |
+------+-------+------+------+------+-----------+


I repeated it five times, I hit this issue three times with various VMs in any of those three servers.

Then I modified the deployment to put 10 seconds sleep between each `vm-host compose` and with five tests I did not encounter the issue.