Argo CD by default uses the label app.kubernetes.io/instance to track resources it creates, but it can also be configured to use a custom label and/or annotation.
Finally I found I should add configuration /etc/crictl.yaml:
Found the cause, maybe someone will find it useful in the future.
This happened because flannel is not correctly set up for an on premise kubernetes environment.
I installed the default kube-flannel....
You will probably find the error in either
sudo journalctl -u kubelet -f
sudo journalctl -u containerd -f
My guess would be that you have SystemdCgroup set to false in /etc/containerd/config.toml