When using Istio no mesh ReplicaSet Failures are still not being propagated
What version of Knative?
all
Expected Behavior
After https://github.com/knative/serving/pull/14453 when a Replicaset fails, the Knative Service should fail fast and tell the user what is happening (from the Deployment Status)
Actual Behavior
When using Istio with the no-mesh option, the ReplicaSet Failure is not propagated and is acting as it was before, waiting for a ProgressDeadline error
Steps to Reproduce the Problem
Configure Istio no mesh setup and run TestResourceQuotaError
/assign @gabo1208
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