anonymous userMCT Thank you for your query and apologies for all the inconvenience caused because of the issue.
I did some research on the issue I found that even though according to this resource the feature is supported only in a limited set of regions others are affected as well. The same behavior can be seen when trying to create a VM in other regions as well (West Europe and North Europe).
Few potential workaround like this procedure to enable the EncryptionAtHost feature is not applicable to the above-mentioned regions:
az feature register --namespace "Microsoft.Compute" --name "EncryptionAtHost"
Once the feature 'EncryptionAtHost' is registered, invoking 'az provider register -n Microsoft.Compute' is required to get the change propagated The feature 'EncryptionAtHost' does not support registration.
By following a step-by-step approach of VM creation like this one , the creation procedure completes successfully. Tested with both Windows and Ubuntu images.
I found that some customers are facing the same issue as yours and discussion on same is going on this GitHub thread.You can follow this thread to get the latest information on fix and updates.
Hope it helps!!!
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