I haven't worked with the Azure dynamic inventory so I could be wrong but 
my guess is that with the lines

conditional_groups:
  all_the_hosts: true
  sittst-servers: "'sittst' in name"


You are creating a group called sittst-server which contains your host. You 
then have a file 'group_vars/sittst.yaml' which will only apply to hosts in 
the 'sittst' group and not 'sittst-server'. The 'group: sittst-servers' 
entry in your group_vars file does not assign a group name to the hosts but 
rather just sets the group var which is nothing special. Either chang ethe 
filename to sittst-server.yaml or change the group name in 
conditional_groups to sittst.

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