Coder envbuilder container starts logging 401 errors when using "Update" option

I am seeing an issue where when I use the "Update" option in the coder dashboard after a template change, the coder process get stuck in this state, where it gets 401 errors trying to talk to the coder agent URL. The issue is resolved by using the "Restart" option instead.
2024-06-12 19:43:20.920 [info]  connecting to coderd
2024-06-12 19:43:20.934 [warn]  run exited with error ...
    error= GET https://coder.example.com/api/v2/workspaceagents/me/rpc?version=2.1: unexpected status code 401: unexpected non-JSON response "": Try logging in using 'coder login'.
               Error: no response body


I am using "token" authentication with the coder agent, with config passed to the container for the auth as :
      {
        name  = "CODER_AGENT_TOKEN"
        value = try(coder_agent.main[0].token, "")
      },
      {
        name  = "CODER_AGENT_URL"
        value = data.coder_workspace.me.access_url
      },
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