A strange error in Hyper-V may show up during normal operation or when a Hyper-V backup is initiated:
could not create backup checkpoint for virtual machine
When trying to create a snapshot aka checkpoint for the VM you get the same error.
If there is enough disk space to complete the operation, check the checkpoint folder in the VM settings.
It should be set to the same folder where the main VHDX is located.
Sometimes the error “could not create backup checkpoint for virtual machine” is due to permissions and one more strange Microsoft limitation:
First, make sure the parent VHDX is not located on the root folder. There are some scenarios where Hyper-V won’t like it, such as when checkpoints are to be created.
Second, the issue may be down to a permissions misconfiguration
Run the following command for each folder or volume you have containing Hyper-V virtual machine files:
icacls C:\ClusterStorage\Volume4 /grant “NT VIRTUAL MACHINE\Virtual Machines”:F /T
It will reset all permissions on all subfolders and grant the Virtual Machines group (internal to Hyper-V and hidden) full access.
The main VHDX file would still need to be inside a subfolder, not the root folder of a volume.