I concur - this is still an issue currently. I have an open ticket on it as well. I did the same - installed Airwave 8.2.9 as suggested and tried again with the 8.5.0.0 firmware with the same result: Upgrade succeeds, cluster is up and I can talk to the VC GUI, but upgrade job times out after 1 hour in Airwave and shows failed and never sees the upgraded APs.
I should add, that I recovered by disconnecting airwave (Basic, Aruba Instant, Enable Instant GUI Config: no), downgrading to 8.4.0.2 and then reconnecting airwave (Basic, Aruba Instant, Enable Instant GUI Config: yes).
I have also subsequently used Airwave to upgrade the cluster to 8.4.0.3 with no problem.
So the issue is definitely with the 8.5.0.0 firmware compatibility with Airwave.