Having already fallen to an unexpected 2-1 defeat to the Laotians on Friday, Malaysia knew they needed a victory at Morodok Techo National Stadium in Phnom Penh in order to advance to the last four of the tournament.
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Instead, it was Laos who rose to the occasion as they opened the scoring two minutes before the break through a Bounphachan Bounkong effort, before Souksakhone Bouaphaivanh added a second to put the result beyond doubt.
Although the tournament was initially to be contested by 11 teams across three groups, Group B turned out to be an outright two-team battle following the withdrawals of defending champions Indonesia and Myanmar due to a host of positive coronavirus cases in the respective teams.
The 2022 AFF U-23 Championship is turning out to be one for the underdogs, after traditional minnows Timor-Leste also booked their place in the semis on Sunday as a 1-0 win over hosts Cambodia saw them finish in Group A.
The group stage of the competition concludes on Tuesday with Vietnam and Thailand battling for top spot in Group C, with the losing team still a chance to qualify to advance as they will vie for the best runners-up spot with the Cambodians.