Backup of encrypted VM breaks the VM (9.5 U4)

[HouseAtreides]

Hi

vSphere 6.7
ESXi 6.7
Veeam 9.5 U4

I have VM encrypted using the Encrypted vCenter storage policy. An external KMS provides the keys and the VM works fine i.e. powers on and off.
But when the VM is backed up, the job fails with the error:

10/02/2020 13:42:17 :: Failed to create VM snapshot. Error: CreateSnapshot failed, vmRef vm-7430, timeout 1800000, snName VEEAM BACKUP TEMPORARY SNAPSHOT, snDescription Please do not delete this snapshot. It is being used by Veeam Backup., memory False, quiesce False

Afterwards it is not possible to power on the encrypted VM. vCenter reports the error:

File system specific implementation of [octl[file] failed
Failed to start the virtual machine.
Cannot open the disk <disk path here\vmName.vmdk or one of the snapshot disks it depends on.
Object not found
Cannot open the disk <disk path here\vmName.vmdk

I am using a Veeam proxy that is encrypted and running in virtual appliance mode. To fix the VM I have to restore it from an old backup created before it was encrypted.

What am I doing wrong?

Thanks
HA

[PetrM]

Hello,

Have you tried to create snapshot manually in vSphere client on encrypted VM?
I'd expect the same error message appears, then you can ask VMware support to investigate the issue.

By the way, I'd suggest to create some empty VM to test the behavior instead of using production one.

Thanks!

[HouseAtreides]

Hi PetrM

Before running the Veeam backup I can create and delete snapshots, as either vSphere client VM snapshots or storage snapshots. But after the backup fails it is no longer possible.

Thanks
HA

[PetrM]

Looks like there was some issue with Hot-Add, it fails to find VM disk object according to the error message.
You may contact our support team to investigate the issue, apparently logs analysis is required but our possibility to troubleshoot
technical issues via forum is quiet limited. Please don't forget to share support case ID for our reference.

I'd suggest to check if the same issue happens when Network transport mode is used.

Thanks!