2017-06 Security Monthly Quality Rollup for Windows Server 2012 R2 for x64-based Systems (KB4022726) (further) breaks backups of a 2012 R2 DC when on a 2016 host. I did the little script to reset a few services as mentioned in this thread: microsoft-hyper-v-f25/9-5-hyper-v-known ... 7-135.html and I was getting AAP backups no issues. Install KB4022726 and they die. I show I cannot connect to \\server\admin$ from the host. Veeam AAP tests pass and I can take a Hyper-V snapshot.
6/29/2017 3:20:36 PM :: Failed to create VM recovery checkpoint (mode: Veeam application-aware processing) Details: Unable to perform application-aware processing because connection to the guest could not be established
6/29/2017 3:20:38 PM :: Error: Unable to perform application-aware processing because connection to the guest could not be established
Unrelated to Hyper-V, but this Microsoft KB also causes the Cloud Connect Service to be unable to communicate with the Backup Service on 9392 locally on the provider server. All other functionality seemingly works, and you can even open the provider GUI (which connects to 9392) just fine.
Dev's can take a look at case # 02204685 for confirmation, as removing the KB resulted in successful cloud functionality.
According to our QA team the experienced behavior is caused by OS bug. Originally it's been introduced by KB4015553. It's also present in KB4022726, which makes various backup operations fail with different errors.
Uninstalling said updates or repairing or removing unsuccessful iSCSI connections should fix the issue. As far as I'm concerned, MS plans to release a solution some time this month.