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For updating session duration and provider in AWS PermissionSet, why does it choose to delete and re-create instead of updating the resource?

A provider is a connection to a cloud resource. You can't change a thing from (for example) AWS to Azure unless you delete it from AWS. Even if you could make the change just by logging in as a different user / role, Pulumi doesn't know that.

The provider is effectively a whole new cloud, as far as Pulumi is concerned.

Makes sense. Follow up question - can I force Pulumi to delete then create, instead of create then delete? This often results in failure due to naming conflict

Never mind this might be it <https://www.pulumi.com/docs/concepts/options/deletebeforereplace/>

Exactly. Generally, the default process of creating then deleting requires that you don't override Pulumi's default naming scheme, which supports this process.