The propolis-server running an instance on rack2 panicked, but the instance state continued to be reported in the console as "Running". The instance_state_monitor task in sled-agent is responsible for observing state changes from propolis, which loops calling the instance_state_monitor endpoint. If propolis-server panics, then propolis will stop returning requests from that endpoint. I am unsure of what happens in this case; I assume the request will timeout or fail and report an error, which will exit the task and result in a similar failure mode as #2727.