Corrupted Files After Restore from Veeam Backup for M365 and VBR – Related to Microsoft Sensitivity Labels? - #07706842

[Tobias11]

Hi everyone,

We’re currently facing a critical issue involving both Veeam Backup for Microsoft 365 and Veeam Backup & Replication (VBR), and we’re hoping to hear from others who may have encountered something similar.

Background: After restoring Office files (Word, Excel, PowerPoint) — whether from Veeam Backup for Microsoft 365 or via VBR from local backups — the files can no longer be opened. They appear to be corrupted, even though they were fully functional in their original state on SharePoint or in the file system. Restoring to different SharePoint sites or local paths didn’t help. One notable detail: the restored files are smaller in size than the originals.

Suspected Cause: We suspect a connection to Microsoft’s Sensitivity Labels (specifically the “Confidential” label). The affected files were labeled accordingly, and our internal documentation states that only pre-authorized users are permitted to open or edit them.

Questions for the Community:

Has anyone experienced similar issues with corrupted files after restoring from Veeam Backup (M365 or VBR)?
Was there any link to Microsoft Sensitivity Labels or Conditional Access policies?
Were you able to resolve the issue through configuration changes or workarounds?
Are you using Microsoft’s “Confidential” sensitivity label in production alongside Veeam Backup — and if so, what has your experience been?
Context: Veeam Support is involved (Case #07706842), but no final resolution has been provided yet. They’ve confirmed that Conditional Access applies at the site level, not the file level — but there still seems to be a conflict in our case.

We’d really appreciate any insights or shared experiences — especially if you’ve successfully integrated Microsoft Sensitivity Labels into your backup and restore strategy.

Thanks in advance!

Best regards,
Tobias

[Mildur]

Hi Tobias,

Welcome to the forum. I'm sorry to hear about the situation.

I couldn't find a case with the number you provided, so I looked up the correct number and updated it in your post.
The case has already been escalated and is being actively investigated by our R&D team. I'll keep an eye on the RnD case.

Best regards,
Fabian

[Tobias11]

Hi Fabian,

the Case Number # 07706842 is in the Header and Text. I took the case-number from the Emails VEEAM Support. I have no other case number.

Best regards,
Tobias

[Mildur]

Hi Tobias

Yes, I added the #07 yesterday evening.
Before it was a #03 number. #03 are contract numbers and should not be shared publicly.

Best,
Fabian